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katy @ ngenius.com

As Usual, It’s All About Balance

What about semi-retirement, with deferred gratification not quite so deferred?


Financial columnist Humberto Cruz has long been a model for me of deferred gratification. I remember reading his stories twenty years ago, about how he and his wife gave up something in the here-and-now in order to have something in the seemingly far-off future.

But eventually, the future arrives. Even for Humberto Cruz, who must sooner or later face the fact that he’s done an outstanding job with his money. And that—-even though he’s still working—-it might not hurt to spend some of it now rather than wait until he’s too old to enjoy it.

Without enough money saved, you may have no choice but to postpone retirement. But that doesn’t mean postponing gratification, at least not all of it.

Cruz recently had a conversation with Christine Fahlund, a senior financial planner with T. Rowe Price in Baltimore. They discussed how many aging Boomers are being dealt the hard news that, because of the economy, they might not be able to retire as soon as they planned. And how the news affects them. Some, apparently, go into denial and retire anyway, insufficient funds notwithstanding.

There’s an alternative way to approach this dilemma, says Cruz:

Say you had your heart set on retiring next year, but a review of your finances shows you will need to keep working a few more years to build up your savings. At the same time, and making sure you stay within your budget, you could start to indulge in some of the “wants” you were putting off until retirement.

In other words, according to Fahlund, maybe it’s time to lighten up a little.

“If that is a cruise, take it now,” Fahlund said. “If you wanted to build a better workshop in the basement, start investing in the equipment you want. Do not delay gratification. Focus more on the cruise and the workshop” rather than on having to keep working.

Whatever you do, Cruz and Fahlund agree, don’t retire before the time is right. For every six months to a year that you remain in the workplace, you have that much less time to provide for during your non-working years. And if you can begin to really enjoy some parts of life you’ve been postponing, it might just make going to work much more palatable.

 

 

Posted by Katy on 06/09/08}
in LifestyleDreamsPersonal FinanceRetirementSavings


  1. I’ve never commented or blogged before, but am very interested in your site. 

    I totally agree with this article that we must find a balance between enjoyment now and planning for the future.  We are empty nesters.  Recently my 73 year old mother commented that we must travel now while we have our health and ability to do so.  So we are off to the wild west soon with Mother’s affirmation ringing in our ears!

    Posted by Diana  on  06/10/08  at  08:02 AM

  2. Katy, I love this new bog! It’s perfect for the place in life my dh and I are.

    And we’ve talked about the same idea lately: that once our nest is empty a year from now, we’ll be much freer to do some “retirement-type” things, without retiring. Not only will there be no kids to take into account, but my dh has TONS of use-it-or-lose-it vacation time racked up after almost 25 years at his company, and we have a list a mile long of places we’d like to visit. Great thoughts!

    Posted by Deborah Raney  on  06/10/08  at  08:10 AM

  3. Well, as you know, mom went to Ireland when she was 84, and she might go back when she’s 88, since her passport is still good and she doesn’t want to waste it. My theory on taking that vacation is it’s never too early and it’s never too late. Regarding retirement, I will never have enough money to completely retire - but I would like to look into doing something different when I get my debts paid off.

    Posted by Alison  on  06/10/08  at  04:37 PM

  4. Diana—I’m so pleased that you’re reading and commenting here!!! My mother, who got to take several nice trips with Dad before he died 24 years ago, has always said we need to travel young. She is otherwise very frugal, but she also knows how much harder it is to go when one of you starts to fail healthwise. Just go—and have a blast!!

    Deb—Welcome to the “Leaving November” party! Hope you don’t mind me pointing to this site and gathering comments for the free book giveaway here. You and your hubby are so fortunate to have all that time off! This darned self-employment is for the birds. Our “boss” doesn’t give us a single sick day!  :)  Have fun doing your empty nesting stuff—it is a blast.

    Alison—Your mother is AMAZING. I love her. She doesn’t want to waste her passport—how fantastic! Unfortunately, I’ve seen in happen a few times that it was “too late” for travel—particularly with my dad. He had hardening of the arteries in his legs, and the time he and Mom went to Las Vegas and he ended up being pushed in a wheelchair did it for him. He would not go anywhere again. Sad. You have got great genes!!!

    Posted by Katy McKenna  on  06/11/08  at  05:20 PM

  5. I always admired Humberto Cruz columns and find he’s an inspiration for my frugality…

    Posted by Terri  on  06/14/08  at  03:55 PM


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Are You a Late Boomer?

If looming retirement is catching you off-guard between an aging parent and a revolving-door kid, you might be. If you've delayed travel only to discover they've changed the names of all the countries, you are. And if you're a member of the Baby Boomer Generation who's ready to give back but you've forgotten where you put it, stay tuned. From healthcare to personal finance, from career changes to volunteerism, it's time to boom where you are planted.