Retirement Spending Strategy

This blog is about our retirement under a pandemic crisis. How are we doing? How are we coping? What changes have we made to our life and our lifestyle? What, if any advice would we give or tell ourselves or others so that we all can do better or better prepare?

The main basic advice I would tell anyone is that you should always have a savings account. Forget the 6 to 8 month rule. Under this pandemic it’s obvious that we may need up to two years of savings to get us by. That’s a lot of money to some; us included. It may be well into the end of 2021 before any semblance of order has been restored. Thankfully, we have around 5 to 6 years of liquid savings available to us, so that’s a very good thing.

My main mode of employment for many, many years was Budget Administer to several prestigious law firms. I am very familiar with setting up budgets and sticking to them. I’m not afraid of handling large sums of money, sometimes in the millions. Money doesn’t scare me. Lack of money does. My main quality is wanting top quality products but paying for them at bottom basement pricing. Attorneys loved that about me. That always meant they had the latest equipment, fastest computers and internet services and any and all maintenance repairs were handled with ease, competence and the bank was never broken. I’ve applied these same principals to my own life. To the outside world, we may look like we’re rich but to the budget spreadsheet we’re practically dirt poor. No one would ever guess we live on $25,000 to $29,000 a year. I consider this my greatest accomplishment in life: living high on low.

Enter the pandemic crisis and all those corresponding rising costs. I’m still sticking to a bare minimum budget but it’s costing us $34,380 a year in expenses! Everything, and I do mean everything is going up, up, up in costs. Thankfully, we passively take in $36,000 a year BUT we just took a $3,600 annual negative hit with my daughter paying off her 14 year loan to me (click here for that info). Hubby, who worked for Walt Disney Imagineering for 12 years, has a smallish pension from them (with wife/widow benefits) but if you’ve read the news lately, Disney is laying off thousands and thousands of their employees (28,000 Disney park employees being fired and that’s just a start. click here). Most of the theme parks are closed, thus no revenue is coming in. Disney is hoping streaming will save them (click here). If not, hubs and I anticipate his Disney Pension to be gone.

Should hubby’s Disney pension disappear that will leave just our Social Security income and our investment income coming in monthly. And we all know how little a safe investment income brings in nowadays. So, in other words, this pandemic may bring a financial crisis to our door. What to do?

Hubby’s answer is always that he can go out and get a job. He states he could work at a McDonald’s and a basic pay scale will earn him enough money to always pay the property taxes. Really, I asked him? He just applied for a part time, seasonal job at Fed Ex and UPS. Both times he was politely told ‘thanks a lot….we’ll keep your application on file….have a nice day‘. In other words, the computer algorithms calculated he was way too old. Good luck with that!

My answer is to continue NOW to cut back and save, save, save what ever we can.

During the early onslaught of the pandemic, I watched our $500 monthly grocery bill soar above $700+ for months on end. This month, thankfully, I think I’m going to come in at $400. We’ve been eating more vegetables lately and less red meat. Monday is always Meatless Monday. Tuesday is always Taco Tuesday (chopped turkey vs chopped beef). Friday is always pizza night ($3.00 total) and Sunday is always pasta. Now with the colder weather, we’ve been enjoying soup nights, a side salad and a few slices of fresh, locally baked baguettes and we’re happily satiated.

Hubby does ALL maintenance and repairs. Thankfully Amazon carries most any part he needs (lawn, vehicle, home). I’ve stopped getting my hair professionally cut as hubby gives me a buzz cut every 6 to 8 weeks. We’re back to wearing tee shirts and jeans outside, flannels and tees when inside. No outside activity whatsoever, other than walking, hiking and attending any free event someone, somewhere may host (which is rare). We haven’t seen any friend, family or foe and it doesn’t look like we’ll be seeing either for the upcoming holidays. I’m turning 70 next month and I was so hoping for a big birthday party. Ain’t gonna happen. Not even my own kids will drive up to see me. I’m sick of FaceTime and Zoom.

The only things I’ve updated since February 2020 is our internet access (faster modem but at the same price of $55 a month) and hubby needed a new iPhone @$399 (financed at zero percent for 6 months). Other than those two, we haven’t spent money on anything else.

Full Disclosure: when we got our stimulus check, we bought a kiddie sized pool $470 (12 ft X 30 inches deep) and 1,710 gallons of water ($454) with the money. We had a very enjoyable summer despite it all!!

I take this pandemic very seriously. I have to. On April 13, 2020 my brother died of the coronavirus. He was 76 years old, a retired doctor, living in Florida and just “cured” of bladder cancer. He had to fly to NYC to see a cancer specialist. He was aware of the pandemic. As an ex-doctor he thought he took all the precautions. Obviously, he didn’t. Because of my own bother’s death, I will not go to a doctors office nor a hospital. I didn’t get my mammogram this year, get an annual physical nor see nor speak with my General Practitioner. I have a minor heart condition and am still taking my meds BUT I haven’t seen nor spoken to my cardiologist in 2 years. Seeing him just isn’t worth the risk. Hubby did see his cardiologist in May but the process he went through was almost on the verge of ridiculous.

We did get our flu shots. If I have a medical emergency, I’ll go to an ER. Other than that, hubs and I stay home. The only time we leave is to go walking or hiking. We go food shopping twice or three times a month. Most of our other shopping is done online. Including our doggie needs. It’s a constant, constant financial stressor to constantly, constantly keep our expenses in check. We simply can not make a mistake.

Each day I thank God we have a home to live in, mortgage-free. 40 million Americans will be facing evictions and homelessness next month (click here). I never realized the importance of owning your own, paid-for home in retirement would be. If we had to pay rent, we’d be broke in no time. Our retirement may go well in to our 90’s. We don’t have enough savings or passive income to afford rent for the next thirty years. Many people don’t think of that. We did. I always recommended buying your smallish, forever home no later than age 35, paying off the 30 year mortgage, never ever borrowing out the equity so that by the time you are 65 you can have both a roof over your head AND enough equity (cash) to hold you in your retirement years. Not a bad strategy. It’s painless.

I’m also very grateful that we have a backyard big enough to support a modest vegetable garden. We’ve planted a few fruit trees and I am hoping next year or the year afterward, some fruit will be mature enough to be picked. I’m also very thankful that we live in the valley overlooking the Catskill and Adirondack mountains of upstate New York. Hiking, biking and country walks are abundant and free. So are all the state parks to NY residents! Which translates into low cost camping fees we are hoping to enjoy next year!

When we first planned out our retirement strategy back in our 30s, I had no idea we would wind up like this. Message: go with the flow. Prepare but prepare for your plans to change. On a dime.

Till then, happy trails to us: