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I only have a few years left for personal, financial planning, and I want to retire when my Social Security benefits come into effect. I have the basics in place, but I must expand and add to my retirement funds if I want a comfortable retirement.
Much To Do
Personal finance for me is a little different, because I am self-employed. This means I have no retirement or 401(k) programs that I can join through an employer. I pay 100 percent of my own taxes. This also puts me at the low end of Social Security Benefits when I get old enough to draw. The age for Social Security keeps going up, and the benefits keep going down. I hope there will be benefits when I become old enough to retire, which right now is 67 for me. I am 59, so that only gives me eight years to be prepared.
I Need to Have a Budget in Place
The first step is to have a budget in place. I need to know how much my bottom line is and how much it will be in the future. It's easy to calculate the big expenses like house payments, car payments, insurances and taxes.
Utilities are relatively consistent, but they do tend to go up some every couple of years. The four basic utilities are electric, gas, water and phone.
The next set of expenses I figure, are taxes and insurances, which raise over the years, yet stay at a fairly even amount. Doctor and hospital co-pays and deductibles are always a big chunk of money.
Here's Where It Gets Hard
The daily and weekly expenses, which include, but are not all of the expenses I will encounter over the next several years.
- Vehicle operating cost
- Groceries
- Pharmacy and over the counter medications
- Cleaning supplies
- Dining out
- Coffee and donuts
- Soft drinks and bottled water
- Gum and candy
- Entertainment
- Appliance replacements
- Unexpected repairs
First off, I had Certificate of Deposits with my bank, when they matured, I invested the CD's into the bank's Mutual Funds. For a modest sum, the bank handled my monthly contributions. Then, a few years later, I wanted to expand my portfolio and transferred some of my money to a Financial Planning Institute where I invested in three types of mutual funds, aggressive, moderate and safe.
Retirement Plans Often Fall Short
If I want to retire fully by my Social Security retirement age, I need to pay off all my current revolving bills, credit cards and my vehicles. In the meantime, I will need to increase my monthly contribution to my private-paid 401(k) program.
My retirement plan leaves no room for frills such as designer clothes or fancy blends of coffee. It's time to get real. Five dollars spent every day, adds up to $150.00 a month, which comes to a whopping $1825 a year. I should have planned earlier for retirement and left more room for frills, but the way it is I will barely have enough money for toilet paper.
I would love to be among the senior couples who take cruises and travel the world, but I don't see that in my future. I've been fortunate enough to make enough money to live comfortably and enjoy many of lives finer pleasures, but during my more prosperous times I should have put more money away for retirement.
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