Author Topic: Preparedness as a Retirement Plan  (Read 109614 times)

Offline Sunshine

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Re: Preparedness as a Retirement Plan
« Reply #180 on: August 03, 2015, 11:53:59 AM »
I know this is an older thread, but wow... love, love, love it!!  Has a lot of practical advice and it's giving me a lot of food for thought.  Thinking of it as a retirement plan makes so much sense and is a great way to approach it.  We are 40-ish and have pretty low debt (one car payment and a fixed rate mortgage)... we'd love to buy some land and have been looking, just a matter of finding something decent at a decent price!!


Offline CdnGuy

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Re: Preparedness as a Retirement Plan
« Reply #181 on: August 03, 2015, 02:10:00 PM »
Hi Sunshine,

It makes my day everytime someone enjoys this thread. I'm glad it encourages you and I sincerely hope you do hit your preparedness and retirement goals.

Writing this post was one of the few things I've written that I believe will have a legacy. I'm humbled by people's response to it. Thank you.

Offline scaffdog

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Re: Preparedness as a Retirement Plan
« Reply #182 on: August 24, 2015, 07:00:08 PM »
Just wow, been away from the forum for a while and just finished up a book by Tim Young where he referenced the article from your website...no more than 6 hours later Im flipping around on the forum and boom, I come across this thread! Amazing!  I had to bring my wife up here and show her the thread and show her the book...  Anyways, Im on the path, planning to be "retired" in 3 years.

Offline NoBox

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Re: Preparedness as a Retirement Plan
« Reply #183 on: October 14, 2015, 07:52:09 AM »
Hi all
 Am brand-new here I was scooting around and having a look in on forums stopped in here and seen this thread well a no brainier, I had to register. I know I skipped the intro part but will get there.
This is exactly what I am doing, I've got a business and property on the market now when sold I'll be going to the north woods. At that time income will become fixed so planning is a must now a few things considered while keeping an eye on the world events (scary). Utility bills are not wanted, a well and septic are needed and electricity well be self generated. The ground must be 50 plus acres of mature timber, and some what remote with low property tax. Population need be minimal but with medical within a reasonable reach. All will be geared toward a self sustaining life style. This can be had and done at a low cost without loss of to much convenience if intelligent about it.
 For power I have been looking into type and method over the last two years. Hydro would be great but getting a property that would lend it's self to hydro could be tough considering regulation and head required. This leaves mechanical, solar, or wind I'm thinking wind and steam. Currently I am building a steam system as test to get a real feel for what it could do and what would be needed to run it. The test system is the real deal and complete with exception to battery bank it is small only 4 batteries but should give me a good idea of how things would work. The plus side of the experiment is when over it can serve as a nice little back up that is mobile. I'll be back to the site here to dig deep but must close this post now (things to do)....
Great to be here!
NoBox     

Offline NoBox

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Re: Preparedness as a Retirement Plan
« Reply #184 on: October 15, 2015, 10:22:45 AM »
I a sort of popped into the forum yesterday and became quite excited finding a lot of folks with a mind set close to mine. I then made the brief post to this thread with the intent of coming back to add a little more detail. However I felt I should read the thread first, having done that I am confident I am in the right place. So some history and a bit of what I'm up to who knows it may be helpful to some one at some point.

 I have been self employed most of my adult life (I find it hard to follow others) and did OK. About 2006 / 2007 the writing on the wall suggested trouble on the horizon. I had 6 properties and my home - Yes Bills BIG Ones! Two of the properties were unimproved land the rest were rentals and a Beauty Salon so they mostly paid for them selves. I had a talk with my wife and told her we needed to do something or get caught hard. I had for a few years been trying to get her to agree to changing one of our rentals to commercial and brought this up in the discussion. She agreed, and I went to work on the best property location for the intended purpose as luck would have it we had just evicted that tenant.

Going to take a side trip here I suggest you not do this unless you really understand your local gov. and what you are doing: To save time and cost in converting the property I went to work without pulling permits. I knew if I went to the county they would want a site plan and that can add real cost in a very big way. I went to work on the ground creating parking, lighting, etc. leaving the structure alone knowing a cease and desist order would appear on the door at some point. The object here was to complete the ground work as fast as possible. When the order came I applied for electrical and structural permits which made them happy and what I did let me off the hook for a site plan.

Three months before completing the property conversion getting the door open the bottom fell out of the new homes market. I was a Drywall Contractor with crews and my builders began asking me to work for less damn near at cost. We lost one builder after another (I won't work at cost) when we received our final inspection on the now commercial property as opposed to leasing it we decided to use it our selves. We closed the Drywall business and opened a gaming center / PC & Game Console repair. The gaming center did not pan out the numbers just weren't there, after a few months we shut it down but the repair took off. We were able to carry our debt for a while but could not do it for ever, the properties were the retirement plan. We were faced with some really hard choices. My wife and I talked about this and what to do we are partners in all things. The economy was down, we could try to hold on in hope the economy would recover. But if it did not we could lose EVERY THING! The choice was made and we moved to file for bankruptcy letting everything go including our home with exception to the new business property I made changes there to allow us to live and work there (bankruptcy takes a little time). We did this choosing to believe the economy would remain poor long term and not gamble on recovery in a year or two. The hole left by closing the gaming part of the business we filled with roll your own tobacco products. There are things in life people will buy no matter and tobacco is one of them. The PC repair has been fading over the last few years as mobile devices take over and that is OK it carried things while the tobacco became established.

 This history told, brings me to yesterdays post.

I believe bad things are coming and want to be rural when it happens, just so happens I'm at a time to retire as well. The only thing keeping me from unplugging is the business and ground it sets on. It is currently on the market and fear I will have to make the sale happen others will drag their feet. Debt to value is good so a few bucks can be pulled from it plus other monies. After looking at property, tax, and real cost of living across the country in search of the best, offering what I can afford and want I have found a location. Low tax and low property cost there are few job opportunities there.
I want:
50 plus acres mature timber with home 1000 to 1400 square feet in good condition
Well / Septic
Current property tax under $800 a year
Thriving wild life and fishery
Year round spring with good flow
Cost under 120K (I have my eye on one that is 74K and under 400 property tax)
Within 70 miles to medical
Cost of living under $1000.00 month leaving money for the mattress.
.
The idea:
To be far enough away to hunt unrestricted for meat, raise a few chickens for eggs and meat, fish, grow fruit, vegetables, and tobacco.
We will gather wild berries, herbs, and nuts.
Power - Methane, used oil, wood and other - this will run a steam engine to turn a generator creating electricity and I'll also use the wind.
The home I will change a little I have skills most windows will be removed and insulation upgraded if needed and a large enclosed sun porch on the back.
I'll build a tooling shop, things break, need repair, or created I can do this. I'll also build a garage with pit to service our vehicles. I have most of the equipment for these things now.
I'll dig a root cellar and my wife and I will can, dry meat, dry fruit and vegetables.

I think I have expressed the idea. As many here have said you can not trust in any thing unless you are in control of that thing and retirement built on investment portfolio or promised pension plan may disappoint. True Independence is the lack of Dependence.
Life joy is really family and nature not the glitter and glam that forms the walls of a cell. I have two tattoos one reads born free and the other reads money slave they are a reminder.
Yesterdays post spoke of a steam engine I have built don't let the size fool you it is up to 6HP and 1200 RPMS. I'm adding a link (if permitted) to a video of my boiler build from there you can find other videos of the steam engine etc. and I'll be making more.
The boiler
https://www.youtube.com/watch?v=nniuKMnaoRQ     
         

Offline suzysurvivor

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Re: Preparedness as a Retirement Plan
« Reply #185 on: October 22, 2015, 04:17:00 PM »
our plans are moving ahead albeit at what seems to be a turtle's pace.

we are clearing out our house to put on market next spring.  At the same time, we will have the builder start on our new house out in the woods.   While the sale/building are going on, we'll stay in an apartment and start working our way out of this state and into the next. 

we've planted a few fruit trees on our land with more to come next spring.  We have also found a few 'orphans' around that we can forage from.  I'm hoping to get grapes in the next two years.

I am also concerned about the economic woes of this country and what fallout may happen.  THe best thing we can do is hurry up and get ourselves settled in up north. 

Offline Captain Obvious

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Re: Preparedness as a Retirement Plan
« Reply #186 on: January 05, 2017, 08:05:48 AM »
This thread has been around for awhile but I want to mention how we are using preparedness as a retirement plan.

My wife and I had talked about homeschooling our boys and last year she was finally able to leave her low paying job and stay home with the boys.  We are not "preppers" in the traditional sense but we are doing what we can to give ourselves the freedom to be home with our family as much as possible.  My wife sells homemade cookies, cleans houses and watches a neighbor kid in order to earn money for groceries.  She does not make as much money as before but this way she is almost always available for the boys.  The drop in income was negligible and the upside is that she is here for the family.  FYI, cleaning houses is far and away the most profitable for her and if she picks up a couple more clients then she will actually be making more per week than she used to working for the man.

As for myself, I am still working for corporate America, and on the side I am doing web development work from home.  It's hard developing a new skill when working 40 hours at a job but I recently got a very hefty raise from the computer gig and eventually I would love to be able to work from home full time.  It probably won't make sense for awhile because there are NO insurance benefits when you work for yourself and I have a family of 5 to take care of. 

How does this count as a retirement plan?  The ability to work from home on our own schedule is what drives us.  Even if I'm ever able to "retire" I will still always want to be busy.  I may as well be able to make money from home doing something I enjoy.  Now if I can just find someone willing to pay me to drink beer...
 ;D


Offline NWPilgrim

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Re: Preparedness as a Retirement Plan
« Reply #187 on: January 12, 2017, 05:46:54 PM »
Great thread.  I think far too few average Americans plan for the possibility of normal retirement plans failing.  We started reducing debt years ago and finally got the mortgage paid off a couple of years back.  That is huge!  And we have two good vehicles that are paid off and well maintained. I was getting burned out working behind a computer the last 35 years so when an early retirement offer came up I jumped. 

My wife still works part-time.  Our monthly expenses are about $1,500/month so we could easily get by on either her part-time job or my retirement alone.  The big expenses now are car/home insurance ($270/mo) and real estate taxes ($4,300/yr).  But we are concerned for our futures.  We are in our early 60s and both healthy but saw three of our parents go through prolonged illnesses (diabetes, liver, depression, Parkinsons, congestive heart failures) that without massive family support would not have been possible to care for them.  Professional long term care starts at about $5,500/mo.  So we want to keep reducing living expenses, and develop alternate incomes that we can sustain as long as possible.  I guess we are now semi-retired.

I just finished a three month general labor gig mostly to see if I was still physically capable of doing manual labor all day long.  After sitting on my butt for work so long with ups and downs in physical workouts and more joint issues, this was a major question for myself.  Turns out that I am still fit for work and the more work I do the better I feel!  I feel ten years younger today after that gig.  I feel bad for the 30-something guys I was working with who depend on that low wage ($12/hr, some overtime) as their main family income.  For me it was like being paid to workout.  So, staying in good physical fitness is a top priority right now.  I think physical fitness is a kepy part of a good retirement.  You HAVE to stay physically active in work or recreation or workouts. Otherwise at this age things start to fall apart fast.  One of my sisters is on heart medication, my younger sister had her second hip replacement, and my brother has two knee replacements.  I was feeling mighty creaking until I got working hard.

My thinking now is to start a business that requires moderate activity and that gives me some freedom of scheduling and time off.  I enjoying spending time with the grandkids.  I am looking into becoming a home inspector for real estate sales.  My wife plans to keep working at the school for several more years so we can save up quite a bit of cash for medical emergencies (she has decent health coverage for us both) and possible disruptions to retirement income.  If the business does well then I might expand it to become a family enterprise.  Or, use the savings to by rental properties.  Either way we could end up with incomes that continue past our active participation and are independent from retirement funds or government.

There are a lot of ways to skin this cat but some important points:
1) Have a plan for retirement and don't just retire and die, or think you have 30 more years of spending money on the beach.

2) Get or stay physically fit for the long haul.  It will dramatically reduce medical costs, keep open many more income opportunities and self-reliant chores, and you will feel better and enjoy life more.

3) Several times a year review your budget to see what other expenses you can reduce or eliminate.  It is a huge difference from needing a $4,000/month income to just $1,500/mo.

4) Corporate or government retirements should be used as just stopgap measures until you can get your own alternate semi-retired income established.  Don't plan for those big funds to remain stable over the next 20-50 years.

I think another thread on here mentioned the Alpha Strategy.  I think that is an excellent approach and have used it over my career to some degree (education, stockpile consumables, precious metals) but I forgot the step to gain a second or third trade.  I felt incredibly vulnerable being so highly specialized in my career.  Now I am trying to get into other skill sets to broaden my capabilities.

Offline mountainmoma

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Re: Preparedness as a Retirement Plan
« Reply #188 on: January 12, 2017, 06:04:35 PM »
My only income is social security income, and I do not plan on it being stable for the long haul. My bet is that relative to expenses, it will be less ( either because costs stay similar, and it gets cut 20% to be balanced with money into the plan  -- or, the check I gets stays the same, but inflation eats it up)

I have had worsening health problems, so working seems to be out.

Plan is to develop the studio on the property to be a rental, and so have a small income. It will not be as much as the soc sec check, but not too much lower. Kind of like 80% of the soc sec check.

And, to keep working on having part of my food on site and self sufficient ( garden, cheese making) so keep expenses low.

This would be far from ideal, but beats the alternative.

Offline NWPilgrim

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Re: Preparedness as a Retirement Plan
« Reply #189 on: January 12, 2017, 06:17:00 PM »
Mountainmomma, that is the whole idea, I think: to think about your situation and the years ahead and plan for "what if."  ANYTHING we do toward improving is a huge step compared to the masses who just go along with the big business/big government plan.  Every dollar that is cut from expenses or added to income from more self-controlled sources is that much more independence and flexibility.  Your studio rental idea is a great use of already on-hand resources.

It's great to read 38 yr olds thinking ahead on this, it will make their lives so much safer and enjoyable.  I started later and what I did helped but wish I had done much more.  But that is life, we make the best of what we have now.  It is hard to keep on track with family illnesses, personal disasters, etc. that crop up now and then.

Offline fred.greek

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Re: Preparedness as a Retirement Plan
« Reply #190 on: January 14, 2017, 08:44:24 AM »
Personal Opinion:

Preparing for retirement is an aspect of overall “Prepping”.

Others have mentioned the book “The Alpha Strategy” for prepper/retirement planning thoughts.  I also recommend it, available to read at: http://www.scribd.com/doc/6230684/The-Alpha-Strategy

More reading might include “Early Retirement Extreme”:
https://www.scribd.com/doc/156367201/Early-Retirement-Extreme

And what seems to be a related discussion forum:
http://forum.earlyretirementextreme.com/index.php?sid=fc2910e3947af308e2a353274ae96f69

And perhaps:

https://www.early-retirement.org/forums/register.php?a=act&u=32170&i=ecb04505289a2adf1b9d3ddbc265939d077afe5a

I used to visit these retirement forums frequently, up until the wife and I were both retired.

A significant aspect of our retirement plan was an “Urban Homestead”.  Nearly 20 years ago we bought a small home in a relatively quiet neighborhood, more or less close and central to those aspects we anticipated we would want/need.  (Church, grocery, library, hospital.)  We rented it out, and put the rental profits, and more, back into the home.

    Examples: Solar, upgraded wiring & plumbing, rainwater collection, graywater use, edible landscaping. 

Refinished with long-term durable materials. New windows, blah, blah….

By the time we retired, the place is not necessarily roomy or pretty, but it functions and reduces what would otherwise be ongoing costs… It’s nice to be able to water the garden with “free” water, and pick “safe” veggies whenever we want.  Heck, a few months out of the year the electric company pays us… 

Offline Cronezilla

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Re: Preparedness as a Retirement Plan
« Reply #191 on: January 19, 2017, 12:01:23 AM »
I am really think preparedness as a life plan and make some real lifestyle changes in the future. I might go live in a tent for a year on my property that has really no infrastructure in order to use what small amount of money I do have to build everything I would need on the cheap and that will last using natural building techniques. Earthship-ish

Offline mountainmoma

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Re: Preparedness as a Retirement Plan
« Reply #192 on: January 19, 2017, 12:54:57 AM »

    Examples: Solar, upgraded wiring & plumbing, rainwater collection, graywater use, edible landscaping. 

Refinished with long-term durable materials. New windows, blah, blah….

By the time we retired, the place is not necessarily roomy or pretty, but it functions and reduces what would otherwise be ongoing costs… It’s nice to be able to water the garden with “free” water, and pick “safe” veggies whenever we want.  Heck, a few months out of the year the electric company pays us…

This kind of thing has made a huge difference for me too. At the time I put in solar, I had no idea I was going to have illness force me into early retirement, I just wanted to. But, I am glad that I did. Everything I spent money on earlier that saves me money now has been key to me being able to be here in this house. I barely make it now, but it would be impossible without having expenses so low.

I may never get grey water or rainwater collection at this point, but the wood stove, solar, better roof, sealed crawlspace and windows and space for the animals and garden save me money. And getting rid of all debt, of course.

I am too far from infrastructure though, so this place is not ideal because of that, and as my health isnt good, I have more land than I can use or take care of, so it isnt kept up and I have to pay for what does get done on the part I cant use.

So, you were right to buy closer to where you need to go. I would be better off on 1/2 acre in a town than the 2 1/2 I have this far out. Especially since the idea is too plan for lower income than you imagine, transportation is a very big expense, it is my largest expense after property tax. I imagine at some point I will need to relocate closer to infrastructure or by one of my kids for when transportation gets worse as I age. For now, it is fine.

Offline NWPilgrim

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Re: Preparedness as a Retirement Plan
« Reply #193 on: January 20, 2017, 12:41:15 AM »
This kind of thing has made a huge difference for me too. At the time I put in solar, I had no idea I was going to have illness force me into early retirement, I just wanted to. But, I am glad that I did. Everything I spent money on earlier that saves me money now has been key to me being able to be here in this house. I barely make it now, but it would be impossible without having expenses so low.


Truth!  So many things seem a little bit much just to have it better/lower dependence, but it pays off big over time and especially when your income gets reduced.  Over the years I slowly replaced most of our light bulbs with LEDs and now I notice our electric bill is about half what it use to be.  We have gas furnace and water heater and high efficiency front loader washer/dryer (another investment), so lighting was one of our main electricity consumptions.  I have even moved to more and more merino wool clothes which I hang dry over night so that cuts down a good amount of drying as well.  Every little bit adds up (or cuts down overhead).

It is hard to do big reductions all at once, but if you keep at it in every aspect one day it strikes you how much cheaper it is to operate your home.  One thing I detest is drywall.  It requires lots of upkeep over the years (settling, raised nails, nicks, filling brad holes, etc.).  I was thinking it would be neat if there was a modular steel panel wall, sort of like some office cubicles are made of.  Could be painted or covered in fabric, etc.  It would be more expensive than drywall but would be way tougher and should be at least as good for fire protection if not better.  You could back it with foam board insulation for sound deadening and warmth.  Maybe just use in high traffic hallways and rooms, or for the first three feet like the old style wood panel wainscote.

Anyway, excellent point, mountainmomma!

Offline virtues

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Re: Preparedness as a Retirement Plan
« Reply #194 on: January 23, 2017, 10:14:23 PM »
This is a pretty inspiring thread. I left the city job and bought some land with a little shack the I've been fixing up, and I've managed to get expenses way down that way, but I have a long way to go before I can afford to build the home and the systems that I really want.

Still, we managed to pay off our debts this year and expenses have never been lower so we're in a pretty good place. I'm not getting any younger though!

Offline Ms. Albatross

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Re: Preparedness as a Retirement Plan
« Reply #195 on: January 24, 2017, 08:44:44 AM »

Still, we managed to pay off our debts this year and expenses have never been lower so we're in a pretty good place.

 :clap:

Offline CdnGuy

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Re: Preparedness as a Retirement Plan
« Reply #196 on: January 25, 2017, 07:59:23 AM »
How many years later and this post is still helping and inspiring people. I'm humbled.

Still, we managed to pay off our debts this year and expenses have never been lower so we're in a pretty good place. I'm not getting any younger though!

That is likely the biggest hurdle in self-sufficiency. Stay that way, take your time, pay cash if at all possible. It'll seem like forever to get the things done that you'd like, but once they're done it'll feel like it happened pretty quickly.

There's going to be some increased instability in the economy in the next few years for about a hundred reasons, so you will be very glad you did this. Your family will too.

One thing I detest is drywall.  It requires lots of upkeep over the years (settling, raised nails, nicks, filling brad holes, etc.).  I was thinking it would be neat if there was a modular steel panel wall, sort of like some office cubicles are made of. You could back it with foam board insulation for sound deadening and warmth.  Maybe just use in high traffic hallways and rooms, or for the first three feet like the old style wood panel wainscote.

There are options out there, but make sure that they will meet your local, state/provincial, and national building codes as well as your insurer's requirements.

Are the nails that are popping ones that hold the drywall on? Maybe as those come out, replace them with a drywall screw. If your house is any more than a decade old, the settling should be pretty much done.

I don't know if you have young ones, but the nicks and dings tend to stop when they grow up and go out on there own. ;)

Doing actual wainscotting reduces the surface area you'd need to maintain. Just using thin 1/8 in. plywood and bordering it with 1x3 pine looks great and zero maintenance other than paint. Unless you really ding it. You can also get preformed wainscotting panels in MDF. They look surprisingly good, are reasonably priced, and dead easy to install.

Modular insulated floorboard could potentially be used. It's very expensive though.
Good one-side plyword in general could be used. Again, expensive.

I wouldn't recommend metal of any kind. It'll mess with your radio waves/WiFi/cell and will be a LOT more expensive than anything else.

Depending on the type of room, you can get the same kind of wall covering that is used in industrial food prep kitchens. You can literally hose it down.

There are some great, fairly decently priced, laminate stone options out there too. Mind you, a 4x8 section will cost around $700-$1000 for materials. You can install it yourself, with a little self-education.

And, of course, good old paneling.

Offline Applejack

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Re: Preparedness as a Retirement Plan
« Reply #197 on: January 16, 2018, 04:31:11 PM »
I know this is an older post but some very good advice here. My husband retired disability and we were reduced to one income after that till he had all his retirement in place. If it wasn't for our garden and my canning it would have been a lot harder for us. But the good side of it is we had the house payed for about two years before he became disabled. He has been disabled since 1994.  We have had to buy a new car twice in that time as last time being in 2013 which we paid off in 24 months. So we have no bills other than insurances and utilities.  That garden has helped us to save a great deal on groceries. Our grocery bill on a weekly bases is about 25 to 35 dollars a week. It does go up a bit over holidays but not by much.  I feel we have been very blessed that we have been able to live comfortably without any major problems. We do not use charge cards either though we do have a couple for emergency reasons and hope we never need to use them.

Offline archer

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Re: Preparedness as a Retirement Plan
« Reply #198 on: January 16, 2018, 05:33:57 PM »
good for you AppleJack! Glad to know this works.

Offline CdnGuy

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Re: Preparedness as a Retirement Plan
« Reply #199 on: January 16, 2018, 06:04:55 PM »
Glad to hear you're doing alright, AppleJack.

My wife and I lost our jobs due to restructuring in November. If our house wasn't paid off, we would be in big trouble.
We don't have a garden or any sort of livestock yet. Just never had the time with working 50+ hours a week plus 1.5 hour commute each day.
But we're not going to make that mistake again. I'm not risking my health at another job unless it's to save someone's life.

We're not completely sure what we're going to do just yet, but we're focusing on self-employment.

Offline redrider

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Re: Preparedness as a Retirement Plan
« Reply #200 on: January 17, 2018, 07:39:39 AM »
Wow, tough break, CdnGuy. It sounds like you're keeping a good attitude about it.

I love this thread, it changed my viewpoint, thanks for it.

Best of luck.

rr

Offline PorcupineKate

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Re: Preparedness as a Retirement Plan
« Reply #201 on: January 17, 2018, 10:52:49 AM »
This thread has been an inspiration and I am happy to say that it is becoming far more relevant to my husband and I.  We are ahead of schedule in terms of our long term plans for my husband to retire early. We thought we would be here in our 50s not our 40s. It is a wonderful position to be in but we have no clue on how to proceed.   So we are in the position of trying to figure out a transition plan. 

We have the following items planed out and are working on them.
Paying off the debts is well underway and the recurring discussion is do we pay off the mortgage on the house this year. 

We want to do some upgrades to the property like a new shed, fencing, ponds, greenhouse, solar, new roof, siding, windows, wood stove, whole house generator, and a new kitchen and bathroom.  The house was built in the 1980s and the renovations will be done with aging in place in mind.

We are cutting expenses (other than health care and property taxes ::) )  and working on growing a larger percentage of food in our yard.  We have a rental property that we want to sell in a few years because we do not like being landlords.  My husband is self employed already and likes his work so we are not in a huge rush to have him stop working but he is planning to work less hours.

The big issue is long term financial planning.  We have no idea how to transition from acquiring assets to living off them.   Can anyone point us to good resources on making the transition? 



Offline Applejack

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Re: Preparedness as a Retirement Plan
« Reply #202 on: January 17, 2018, 06:44:42 PM »
PorcupineKate, if you can get your house payed off this year, than that would be your best option because with the new tax plan coming into place, it is my understanding that you won't be able to claim the interest from it. We paid our house off first thing but never thought hubby would end up on disability. It was the best thing we ever did.

Offline CdnGuy

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Re: Preparedness as a Retirement Plan
« Reply #203 on: January 17, 2018, 06:57:19 PM »
PorcupineKate, I guess it depends on a few things.

Do you have any other debts? What is the interest rate on those? Paying off the debts with the highest interest rates first results in reducing your debt load more now and in the future.

If the mortgage is your only debt, consider paying it off asap. Interest rates are starting to creep up in several places around the world. It is very likely that they will start climbing in the U.S. soon.

Can you hand a jump in rate of 2-5 points? I mean, if your rate is 3% now, can you handle it doubling? Tripiling?

Call me paranoid, but I expect to see rates go nuts like they did in the early 80s in the next 5 years or so. Imagine your mortgage at 18%!

Offline PorcupineKate

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Re: Preparedness as a Retirement Plan
« Reply #204 on: January 17, 2018, 07:43:48 PM »
We are in really good shape on paying off the debt.  It will only take us a couple more months to pay off everything except for the mortgage on our current home and mortgage on our rental property.  We are planning on selling the rental because we do not like being landlords.

We are planning on staying where we are and playing off our mortgage on the house  The debate is really about pulling money out of investments to do it.  Do we cash out to pay off the mortgage or take longer to pay it off and not touch the investments.  We are both savers by nature and it has paid off but I have no idea what to do next when the debt is paid off and our cost of living continues to drop. 

How do you plan for not needing a pay check and how do you manage your assets so you don't need a pay check in the future?  I wasn't thinking we would actually achieve this but it will happen in a few years and I need to be educated and I don't know where to start. 

Offline mountainmoma

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Re: Preparedness as a Retirement Plan
« Reply #205 on: January 17, 2018, 07:51:48 PM »
PorcupineKate, I guess it depends on a few things.

Do you have any other debts? What is the interest rate on those? Paying off the debts with the highest interest rates first results in reducing your debt load more now and in the future.

If the mortgage is your only debt, consider paying it off asap. Interest rates are starting to creep up in several places around the world. It is very likely that they will start climbing in the U.S. soon.

Can you hand a jump in rate of 2-5 points? I mean, if your rate is 3% now, can you handle it doubling? Tripiling?

Call me paranoid, but I expect to see rates go nuts like they did in the early 80s in the next 5 years or so. Imagine your mortgage at 18%!

I think most people here have fixed rate loans ? At least I should hope so -- or at least an adjustable with good, set terms on conversions to a fixed or a low cap on the amount it can adjust ?

Offline PorcupineKate

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Re: Preparedness as a Retirement Plan
« Reply #206 on: January 17, 2018, 10:17:21 PM »
Our mortgage is a fixed rate so I am not worried about rate increases.

Offline mountainmoma

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Re: Preparedness as a Retirement Plan
« Reply #207 on: January 18, 2018, 12:24:37 AM »
Our mortgage is a fixed rate so I am not worried about rate increases.

Maybe loans are different in Canada ?

Offline CdnGuy

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Re: Preparedness as a Retirement Plan
« Reply #208 on: January 18, 2018, 08:45:18 AM »
I'm no financial advisor by any means, but what a lot of them seem to say is that you look at the interest on your investments and the interest on your mortgage. If you have investments that have a rate of return lower than the interest on the mortgage, take that investment and pay off the mortgage.

The logic is that by paying off a mortgage, whatever the interest rate is on it is your rate of return. You may want to look that up though. I'm pretty sure I'm mangling things.

Mortgages in Canada are a LOT different. The biggest difference being that there's nothing about our mortgages that one can claim on their income tax return. That sucks.
We also have a stress test to get a mortgage. You have to be able to handle the mortgage not just at the current rate but if it jumps a few points. We're heading quickly towards a rent-only middle class and lower.

Here, even if you have a 20 year mortgage at a fixed rate, the rate is usually fixed for a max of 5 years. Then when you renew, the rate changes.

Offline redrider

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Re: Preparedness as a Retirement Plan
« Reply #209 on: January 18, 2018, 08:53:22 AM »
Here, even if you have a 20 year mortgage at a fixed rate, the rate is usually fixed for a max of 5 years. Then when you renew, the rate changes.
That's how our commercial loan worked but for our home place, 3% fifteen years fixed, baby!