May 17, 2013

Aspire to Retire: Simple Sizing

Late in 2011 I wrote a post about frugality and retirement. In re-reading it recently the message remains important. I am going to take some of it and add some fresh thoughts for this post.

I read the phrase, Simple Sizing, somewhere in the last few years and like it. Simplicity makes the process sounds as if we have all chosen complexity before. Downsizing can sound a little draconian and too much like what businesses due when it is time to shore up the bottom line. Frugality has a tinge of religious fervor that carries with it a feeling self-denial. But, whatever word we decide to use it is not unusual for some cutbacks to occur on the path to a satisfying retirement?

Simple sizing seems a good way to summarize what one is attempting to do: make our life easier by putting our possessions and wants in balance with our needs. I don't care how disciplined you may be, life has a way of adding clutter. If that weren't true the storage business wouldn't be booming. Our garages would actually be able to hold a car instead of our stuff. Do we really need a terabyte of hard drive storage? That is enough space for over 300,000 photos. OK, so maybe Betty will eventually fill one, but even so.....

There are folks who think of cutting back as being a smart steward of their money. A free movie from the library occasionally replaces the $10 ticket at the local cinema. Dinner out can be either the $5 foot long sub at Subway or a home cooked meal instead of the $30 restaurant experience. Do we really need a new wardrobe for summer?

For some others, the word takes on an almost religious tone. Spending more than is required to stay alive is to be avoided. Living space is cut to the bone. Almost all belongings are given away or sold, leaving a dresser drawer with a few changes of clothes. If possible, a car is replaced by public transportation or walking. Health insurance is dropped, in favor of self-medication and an occasional trip to the emergency room or free clinic.

This second interpretation is not what I think about when I think of simple sizing my retirement. I think of not being wasteful, not spending unnecessarily, of being economical and thrifty. How many people would not find those words something to strive for? The problem comes when each of us puts our own interpretation on those words. To somebody a 60" LED TV screen is a necessity. Buying a $60,000 car instead of the $75,000 version could be considered thrifty.

Simple sizing is in the eyes of the beholder. Living on $100,00 before retirement and $70,000 after is certainly more frugal. But, for many of us the numbers may be more like $50,000 before retirement and $25,000 after. So, how does a satisfying retirement work?

Making it work


There is no argument that it takes work and a commitment to reach the goal. It requires reassessing what you need to be happy and content. It demands that you prune those things that no longer fit within your budget. It pushes you to decide what are needs and what are wants.

Of course, a "need" for me could be a "want" for you. I need a high speed Internet connection to be able to blog. Since blogging is my passion and what occupies several hours of a typical day, cutting out the Internet connection isn't an option. I'd give up going out to any movies again if that was the trade off my budget demands.

For you maybe a "need" is a meal out at least once a week at a decent restaurant. Your volunteer work, or babysitting the grandkids, or part time work at the store leaves you drained by Friday. A meal out with your spouse, friends, or even alone, is something you look forward to. It is a reward to yourself for the week's efforts. That is a need for you and your budgeting decisions will reflect that.

Simple sizing may mean that you have to settle for a medical insurance policy that is designed to help you only if hit with huge bills after an emergency or major surgery. Regular doctor visits or drugs come out of your pocket. So, you do your research and find out the hospital and local Walgreens have regular free clinics for blood pressure checks or diabetes testing. Costco or Walmart will sell you a 90 day supply of the generic version of the expensive brand name prescription for $10.

Here are just a handful of examples of what simple sizing in retirement means to me:

  • Spending time with my grandkids and family. Except for gas = free
  • Watching a movie or documentary at home from either the library or Netflix. Cost is $17/month (less than one movie out for 2 people)
  • Sitting on my back porch, reading and watching birds and clouds = free
  • Cutting my cable TV bill from $90/month to $20
  • Running errands only 2 days/ week. Saves approx. $70/month in gas
  • Cutting meals out to just once every 10 days. Saves $160/month
  • Not buying new books, only used ones or going to library. Saves $50/month
  • Keeping a 10 year old car that squeaks and rattles for another few years.
  • Clipping coupons and paying attention to sales on stuff we need thus cutting our monthly food budget by about $75.
  • Only doing laundry and running dishwasher between 9 PM-9AM during the week (rates 66% lower).
  • Buying an RV and making it our vacation vehicle for the next several years..a long delayed goal that has proven to be a tremendous addition to my retirement happiness and well-being.

That last example is important in this discussion of simpler living since an RV is not inexpensive to buy or operate. For Betty and me it gives us a freedom we have been seeking. It gave us a break from our routine, allows us to step away from daily commitments and stress, and allows us to add rich memories to our marriage. At that point, it had become a need. It is an investment in ourselves.

Balancing needs, wants, and resources during retirement do work together. It requires being flexible. It means you know yourself well enough to understand what you need and what you can adjust to being without. It shouldn't mean leading a bare-bones, sterile, hand-to-mouth existence at all. It is about re-balancing, or simple sizing what you have and how you will mold it into what you need.

Share with us your efforts to simple-size.

37 comments:

  1. Early in our marriage we knew we were committed to avoiding debt (except mortgage) and lived below our means. We worked hard and carefully saved so that we would be able to enjoy retirement while still relatively young.

    Our spending habits have changed over the years. While never extravagant with our lifestyle, we've gradually moved to less expensive forms of entertainment. Red Box movies are great. The local Mexican taqueria has great food at a reasonable cost. Riding our bicycles, taking walks, bird watching, exploring the great outdoors; all great activities that we love, and are easy on the wallet.

    Our local library has free Kindle books to loan, providing many hours of enjoyable reading (although the sign out is for 3 weeks, so can't take too long to read a book!)

    I no longer need the expensive phone plan, now that I am retired. Once my contract expires, I'll be looking for less expensive options. One more example of "simple sizing" that just makes sense at this point in our lives, and will not in any way negatively impact on our quality of life.

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    1. I forget about Red Box. Are the rentals still just $1? That is a great deal, though honestly not too many of today's newer movies attract me. One exception: Iron Man 3 has just enough humor and personality to make it a fun 2 hours.

      Isn't it interesting: I blog and spend a lot of my day with technology yet still prefer old school printed books from the library. Phoenix also has all sorts of e-book and MP3 options, but I still prefer to hold a real book in my hand most of the time.

      My wife wanted to be able to text our kids and several of the people she interacts with at church who refuse to e-mail(?). So, our cell bill has gone up recently. I had to prune from another category to keep income-outgo in balance.

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    2. Red Box movies are now $1.20. You're right, most of the movies out there are nothing of interest to us. However, if patient, some good ones come along.

      Over the last 3 months we've rented from Red Box several good ones: Lincoln, Argo, Hitchcock (biography starring Anthony Hopkins who did an outstanding job!), Franklin, Hyde Park on Hudson, and Zero Dark Thirty. All of these were excellent, except Zero Dark Thirty, which was just too violent for my liking. Tonight we're watching Les Miserables.

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    3. Add to that list 42, the story of Jackie Robinson. We saw Argo and enjoyed it quite a bit, though aren't sure why it won so many awards. Lincoln was incredible. Daniel Day Lewis "was" Abe Lincoln.

      We have Zero Dark Thirty on our wish list for VUDU, but like you, I'm not a big fan of lots of violence. I may choose not to watch it.

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    4. My solution tends to be redbox for current and no so current movies and the library for classics. Although we may have to get netflix just to watch Lawrence of Arabia. Watched Star Trek last night in preparation from the new one.

      I was VERY dissappointed in Lincoln. Im not sure if its because DDL was trying to compensate for his height so much by some wierd poses or what.

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    5. Interesting reaction to Lincoln. I love it when these comments expose different points of view. Otherwise, we're just continually patting each other on the back!

      Honestly, I have not looked closely at Redbox in quite awhile. I know I can go online and see if a particular movie is available in a particular machine. That is pretty cool.

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  2. As usual, your post today gets me to thinking. ( I like that). In June we will be one year since we retired. Still working on Simple Living and finding our needs. To the positive, we downsized our house and moved to Arizona. We are down to one car and we able to come debt free. We live on one pension and bank the other. But still looking for ways to cut back and still live joyously. Still working at getting the right balance for travel and "staying put" and hobbies and volunteering. I imagine it will stay a work in progress for some time to come and continue to change as we age.
    However since it is retirement, it seems like a happy challenge rather than the problem it would have been previously during our working lives. Have a great weekend! Cindy

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    1. I think we are going to shift to one car next year. In order to make the percentage rate of withdrawal from my IRA work I want to cut from the more standard 4% to 3%.

      That second car costs about $1,800 a year to maintain, insure, and keep full of gas - all for less than 4,000 miles a year. That seems like a poor use of our funds.

      There are a few other categories that will be pruned to shave another thousand here and there to bring the withdrawal rate down where I want it to be.

      Like you, we are looking at the balance of RV travel vs. stay put and enjoy all we have close by. I imagine for the next several years the RV trips will occupy a decent amount of our spring and summer, while staying put with take place in the fall and winter.

      Have a nice weekend, too, Cindy.

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  3. May I present a flip side benefit? By doing much of what you've described, we were able to double our Travel budget without altering our withdrawal rate, which is currently a fairly conservative 2.75%, though we expect it to be lower going forward if/as the current stock market upward trend continues . .

    Mr. Money Mustache has an excellent article up on this on his site right now, titled "The Principle of Constant Optimization." Though some may consider his approach to be at the extreme end of the spectrum, there are still many takeaways anyone, regardless of income or income producing level, can apply.

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    1. I just quickly scanned the article (no time to read/study it at the moment) and it looks fascinating. Mr. Money Mustache is listed on my blog roll because he isn't afraid to take a different approach to common issues.

      You and Mike have one of the most aggressive travel schedules I have ever seen. Only blogging friend Linda Myers equals you. She and her husband took 27 trips in the first two years! To keep it all within a budget that has such a low withdrawal rate is quite a feat. I expect to ask you about it in some detail when we meet for lunch in Portland in August!

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    2. Update: Mr. Money Mustache's article on Optimizing is excellent. We are saying the same thing, though optimizing is probably a stronger word and implies positive results.

      Thanks for pointing the post out to me.

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    3. Well, it was actually 27 trips in the first three years. That might move me down the list of travelers.

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    4. That still works out to 9 a year, several of which were overseas. That keeps you way up on the list!

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  4. I believe that there is no one size that fits all. Needs and wants vary, one person's ability to afford items is better or worse than another's - basically what floats one person's boat can be infinitely different than others. Certainly finances will dictate a lot of that, as well as attitudes towards the environment, and whether your nature is to be frugal or not (personally I like the word). And Redbox has gone up to $1.20/video; still a great deal, but I agree that there isn't really a tremendous number of "popular" movies out there.

    Finished your latest e-book on the plane. It was fun reading others answers to the questions, and gave additional insight into many of your regular readers as well. Next time you need to pick a "cooler" name for me - that one is eternally identified with the "Cheers" sitcom. I also trust that buying your e-book does not violate any frugality principle :)

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    1. The good news is you remember how you answered the questions so you could figure out your alias! Next time you can be Cliffy or Norm. And, no, $2.99 is still well within the frugality range.

      Add a review to Amazon if you can. Thanks!

      Redbox to $1.20? That is a 20% increase! BTW, I can also highly recommend 42, the Jackie Robinson movie. It is hard to remember we were so blatantly and openly racist just 50 years ago. The racism remains, but I have to believe most of us are nowhere near where America was in 1960.

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    2. I noted the 20% Redbox increase as well some months back, though we have been able to offset it by waiting for their 50 cent off promo code deals. I get about two a month from them on average. It's become a game with me to see how low we can go on rentals.

      Our movie theatre (Regal) has recently starting running movies that start before noon at a discount lower than their early bird movie discount. Yesterday we saw the new Star Trek movie for $6.00 each.

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    3. AMC theaters offer $5 before noon on weekdays which is a pretty good deal if you stay away from the popcorn and Coke.

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  5. I am so enjoying this post and comments. We all seem to be "giving up" things that don't matter very much to us to have the things that we are passionate about. We don't have to do or have just because "the Joneses" do. We find each year we fine tune a little. Some years we want different things or the money is a little tighter or freer that year for whatever reason. Thanks so much for all the insights and that of all the readers.

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    1. Thank you, Linda! I wasn't sure if this post would generate many comments, but obviously it has. As we each share different approaches we each find a potentially productive path for ourselves.

      Each year is a different "season" in our life. The ability to adjust is one of the best parts of a satisfying retirement.

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  6. In preparation for my retirement (7 years away), I've cut off the landline and internet access at home, only use my cell now. This saved me $90. The cable is still on right now, but I'll reevaluate that as I get closer. I love that the library is just a few miles from my house, and yes I also prefer holding a real book in my hands. My funds seem to be doing pretty good in terms of growth, but I'm toying with the idea of living on way less than originally planned. I've figured that if I can get down to the $25,000 - $27,000 mark, I can cut my wait from 63 to 62.

    The sale of my vacation home should take place in two weeks so that I can add addtional savings to my retirement "nest egg". I have a two year time frame to sell my primary residence and downsize to something much, much smaller and cheaper. However, I'm trying to determine if I can cut that time down to 18 months.

    I hope that there will still be affordable season tickets to our performing arts center, but I'm budgeting for the next level up just in case. I'm working on decluttering some of my closets now in preparation for my eventual move. If I can go to a play every quarter, one theater movie each month, and one out of town trip per year with lots of museum runs in between, I'll be a happy camper.

    It's simple sizing, right sizing, downsizing and everything in between. I think whatever label works for you use it. It all comes out to living life on your own terms.

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    1. Based on your comment I just had a thought that I will have to play with: if I use my cell phone as a mobile hot spot could I do away with my $70 a month cable Internet bill? I'd have to pay $30 more per month to get enough data from Verizon to keep me from maxing out, and I'm not sure what the speed is like. But, since I already pay for the mobile hot spot, can I use it more?

      You are well on your way, Gail. It is great to read someone's approach that really understands needs and wants and the sacrifice each entails.

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    2. I would be very interested to know what the speed for the mobil hotspot is. I have toyed with the idea too. My cell phone is very fast so I don't see why the mobile hotspot would be any different. But I am not quite clear how that works.

      b+

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    3. Barb, I played with it a bit yesterday. It showed 72MB which is faster than the maximum speed of 50MB I'm getting from my cable hookup. I have found I need at least 15-20MB to handle an HD feed from Netflix without buffering.

      The problem is the amount of data being used. Until I changed phones I was still under Verizon's unlimited data plan. That is no longer offered. For now, based on past use, I am buying the minimum of 2GB per month, about double what the three phones on the plan are using.

      According to their calculator for every 3 hi-resolution movies I'd use at least 1.2GB. Heavy web surfing would add another 5-7GB per month. So, I'd have to buy at least the 20 GB package to be safe. That would be the same cost as my phone data package and cable Internet charges are now.

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    4. Wouldn't work for me to use only my phone - need a larger screen to see it!

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    5. Actually, if you have WiFi on your laptop or computer, you'd put your phone nearby and it provides the WiFi service so your regular computer is connected to the Internet.

      You'd be using your regular computer, not the tiny screen on the phone.

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  7. I think we need to continually adjust because even in retirements priorities can change. I am continually also trying to find a balance between traveling and staying at home (hobbies and volunteering are VERY important from me and I am not willing to be gone from volunteering more than about a third of the year). Do fine tuning is a "good thing". Everyone gets to spend money on things that are important........and we are all so different.

    That said, I'll recommend the book "Right Sizing" for anyone whose having any struggles at all with giving up possessions or moving smaller in terms of housing!

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    1. I like "right-sizing" even better than "simple-sizing." It is a better description of the goal. I'll look for the book, too.

      One thing about blogging is I'll never run out of books to read. I get great suggestions every week. Thanks, Barb.

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  8. One of the best books I read about money and abundance was The Soul of Money, by Lynne Twist. She uses the word sufficiency, primarily in discussing ending world hunger, but I think it applies for everyone. We'd have to change our economic models, but I think we're going to have to do that anyway.

    Were you sure you wanted to say, "Cutting meals out to just once every 10 days. Saves $160/month" or was that tongue 'n cheek.

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    1. ee, another book suggestion. The great part is 90% of the ones mentioned are available through my library and I like 90% of those 90%. That is an excellent closing ratio!

      We used to eat out once or twice a week. At an average of $40 each time that would have been around $240/month. If we only go out each 3 times a month the savings is......$120. You caught me. That wasn't tongue in check, just sloppy math.

      Now, if I had said cutting "out meals to just once every 10 days" that would have been cause for alarm!

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    2. Just ordered the book from our library. Once upon a time I would have gone directly to Amazon!

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    3. Me, too. I check with Amazon first to get a full title or author and read the reviews. Then, I go to the Phoenix library web site. If it exists I add it to my bookshelf or hold list.

      If the library doesn't have it, then I decide whether it is worth whatever Amazon is charging.

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  9. In 1950 I had some extra money from Christmas and birthdays and I “wanted” to buy a pellet gun. My father wisely said, “Do you WANT or NEED this gun”? Obviously, I did not NEED it. I never had a pellet gun and did not suffer any loss. That was a seminal moment for me regarding “wants and needs."

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    1. This reminds me of the Christmas Story movie. Did your mom say the gun will put your eye out?

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  10. Bob, this is just spooky. I wrote about the same subject on the same day. You are so right when you say that your need it my want. One size does not fit everyone. But I think the concept is one size. "Simple" is defined by who we are but no matter what it truly is, it is the very best way to make our income go a long way.

    Thank you for your thoughts.

    b+

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    1. Great minds and all that!

      I am re-reading the 7 Habits of Highly Effective People. Stephen Covey deals with wants and needs and their overall effect on our happiness and success. His concept of us working on our circle of influence, meaning those things we have control over like attitude and response to stimuli is so on target.

      I love his statement that it is so easy to work harder and harder to climb the ladder of success...and then realize the ladder is leaning against the wrong wall.

      Thanks, Barb.

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  11. We travel a lot, but it's usually frugally. We're frequent flyers on Alaska Airlines - and we travel enough we're MVPs now, getting 50% bonus miles for each flight, a companion fare certificate each year, and two free pieces of luggage.

    For the road, we belong to Evergreen Club and Affordable Travel Club. We contact club members, arrange to stay with them for a night and a breakfast, for $15 or $20 a couple a night. We host other club members and meet new people. Right now we're hosting a couple from Minnesota for three nights. They do their thing and we do ours, and we've had a couple of interesting conversations. We have travel in common, and children, but in other areas we're quite different. Always mind opening!

    We rarely go to movies - we have Netflix instead. My husband doesn't like being in crowds, so that's a good option for us.

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    1. I know you've mentioned the travel clubs before and the good experiences you have had with them. I'll take a look. We couldn't host anyone since the guest room became Betty's office, but if it works one-way that might be an option.

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