Some of my most interesting thoughts about finances come in response to reader's comments.
Master Po, the author of The Po File left a comment on my last post wherein he takes issue with my expectation that my financial needs will be less after I retire.
I will resist all my inclinations to make "grasshopper" jokes (though anyone setting themselves up as "Master Po" has certainly heard more than a few!) but I would respectfully disagree with his position.
I admit to being influenced by Jonathan Pond, particularly his book, "You Can Do It: The Boomer's Guide to a Great Retirement."
It is Pond's theory that all those charts showing that we're going to be eating catfood once we reach age 70 are self-serving statistics twisted by various financial institutions who want us to invest with them.
If all our dreams are of fancy beachhouses in Bermuda, then most of us are bound to be disappointed in retirement. But if we're looking for a moderate level of comfort and security, perhaps on along the lines our parents enjoyed, then we are likely to get there. And that is true even for those of us with late-life debt and nearly-but-not-quite-enough savings.
My personal plans are to have $50,000 a year from a combination of Social Security and investments in retirement. But as I've said before, I actually think I could live well on $36,000 a year.
Why do I think that?
Well, for starters, that's what I live on now. I make more, but I'm putting a third of each paycheck into my 401(k). And I currently have a mortgage. But in 4.5 years, the mortgage will be gone. I'll still have homeowner's insurance and property taxes to pay, but that's a far cry from my current $1334 a month.
For another thing, by delaying retirement to age 69, I'll get a maximum social security payment, and I will be eligible for Medicare. I'm just not one of those folks who believes that social security is going down the tubes and won't be available when I retire.
And finally, there is always my hope that my family's needs will lessen over time as they become more adult in terms of their finances. I certainly do not expect to have children or grandchildren still living with me when I retire.
While I do want to do some traveling during retirement, most of my desires for retirement living have to do with reading, sleeping in, volunteering, and other things that do not take much in the way of money.
I do recognize that inflation is a factor, and that it must be accounted for. Hence, my desire to have $50,000 per year available to me.
While I value Master Po's input, I still think he's wrong. But if it turns out he's right, I'll put away my catfood and head over to his house for dinner!