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Chris Farrell Oct 18, 2011

Question: I am planning on retiring from Federal government with a pension of about $19,500 at age 60. I have $300,000 in savings and I will receive SS eventually. I have a mortgage with a payment less than $600, no other debt. I want to spend less than $30,000 on a remodel.

I plan to work, but the big question will be whether I can find work at minimum wage or at a professional salary. I get queasy every once in awhile thinking…….”what are you thinking”. Why am I so set on retirement now? Because my friends and life is in Red Lodge and my work is in Colorado. I do not want to have more money and less ability to enjoy the things I am now missing — skiing, whitewater kayaking, travel (which I do on the cheap). I am make my monthly set expenses (housing, insurance, utilities) with about $900 left over for food, gas, gifts, travel, car repair. Can you give me any advice? Chris, Red Lodge, MT

Answer: Your question reminds me of a wonderful passage by Henry David Thoreau. “This spending of the best part of one’s life earning money in order to enjoy a questionable liberty during the least valuable part of it, reminds me of the Englishman who went to India to make a fortune first, in order that he might return to England to live the life of a poet,” he wrote. “He should have gone up garret at once.”

I don’t think you’re wrong at all to be thinking about retirement. I applaud it. The way you’ve described it is your really embracing another stage of life.

Yes, you’re planning on saying goodbye to your current employer and income for the last time. But you’ll still be earning some money which means you won’t have to draw down savings (much). It also appears that what you enjoy doing won’t cost you much money. Many gloomy calculations often under-estimate how creative people can be at doing what they love without spending much money.

On a practical level, I would plan on taking Social Security as late as possible, at least to your full retirement age. The payoff from waiting is huge.

I would plan on making some money even if it’s a small amount. It helps, plus it keeps your skills up to date.

I would run budget scenarios to see how your planned expenses and potential income match up. Be conservative in your calculations.

Two helpful resources that will encourage you to pursue the next stage of life are Ralph Warner’s, Get a Life: You Don’t Need a Million to Retire Well and Ross Levin’s Spend Your Life Wisely: The Deeper Meaning of Money. For running the numbers I would spend time at the analyzenow.com website.

Good luck.

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