Episode 638(150) How much is enough?
This is Retirement Talk. I'm Del Lowery.
How much money is enough? That’s a pretty good question. When people consider retirement, that is usually first and foremost in their minds. They just don’t seem to know how much is enough. There seems to be no hard and fast rule. What is a person to do?
I remember facing this question years ago when we decided to retire. It was most important. We had a chance to take an early retirement offered by the state of Alaska. We liked our jobs, but downsizing was happening in our profession and we were being enticed into considering stopping work when we were fairly young. The oil boom was over and people were leaving the state. They needed to cut staff in the school system. I was 44 and Brenda was 41. Now that is pretty early to even consider retiring let alone doing it. What to do?
“Life is short”, someone said somewhere at sometime. I taught philosophy and took those kind of sayings to heart. Though we liked our jobs, we realized the finality of life and knew that there may be other ways to live than continuing in this one direction. We had ideas as to what we might do if we changed direction. The big question came down to money.
If we wanted to continue to earn money we wanted to stay in our jobs. If we could live on the money provided in our early retirement package then we would be free to cast about: do what ever we wanted, live where we wanted, move, or not move, sleep late or rise early. We could go back to college, or hike in the mountains. It wouldn’t matter. We could follow the path laid out by Mother Teresa or we could go into seclusion and hide within a log cabin deep in the woods. Whatever?
How could we know if we had enough money? It was comforting to know that we were living well at that time and would see a pay raise every year as long as we continued to work. But the question loomed: “How much is enough?”
We took a clean piece of paper and wrote down how much money we thought we would need each month. The list started with housing costs: utilities, upkeep and that sort of thing. We had paid off our mortgage on a ten year plan so that was no longer a factor. We then figured the price of transportation: car upkeep, etc. Then came food and clothing, etc. That really wasn’t much. Our retirement plan included super good health care insurance; good until we die so that was not a factor. We were very lucky on this one. We totaled up estimated figures and were amazed at how low they were. It became clear that if we did not buy a boat, airplane or huge RV we could easily say goodbye to the world of work seemingly forever.
That was 32 years ago. How have we done? Prices have gone up. What has happened to our budget in light of all the changes? I am happy to report we’re doing fine. We have never had to consider taking another job for money. What was the key? I think it’s the guiding principle of spending less money than you take in. Of course we have all heard that one forever. “Spend less than you make,” that has worked for us.
I know people facing retirement are always wondering about the future costs and the limits on their income. I guess that will always be a guess, shot in the dark, or estimate at it’s best. But sometimes I think this limiting factor is just an excuse to avoid change.
I’m reminded of a story of Alexander the Great when he was on the move and his army rolled into India. It is said that he was sitting their on his big white horse with an entire army strung out behind him and he came on six men standing in two columns side by side. They marched up and down in place. They were silent. The conquering hero asked his interpreter what the men were doing and the response was, “They are asking how much land you need since we all get only six feet – enough to bury us”.
I think of this story when I consider how much money one person needs. It doesn’t seem to me that one needs much. Of course health care is a big unknown every day of our life. We were lucky with our coverage. And fortunately most Americans are covered with Medicare during most of their retirement. Add to that the uncertainty of how long we each shell live and the mystery only becomes impossible to answer with absolute certainty. We might outlive our savings or our retirement plan might go bankrupt or the sky might fall. We just don’t know.
I know we live in a consumer society where we are encouraged at every turn to buy something new but that doesn’t mean we have to agree. There are other choices. And I do believe with just a little bit of self control one can manage to enjoy life on very little of what the consumption industry serves up.
I heard a commencement speech one time where the speaker’s guiding principle was “The one with the most toys wins”. I couldn’t believe he would tell that to aspiring graduates. I knew him and knew he believed that life was a race to accumulate but I never imagine him trying to pass that on as worthwhile advice. But he did. I still can’t imagine that being a meaningful goal in life.
As a postscript: He did accumulate and saw no bounds to the method by which he did so.The last I heard of that speaker was that he was spending time in jail and all that was his had been taken by the law. Sad story.
This is Retirement Talk.