Toward a care-free retirement.

20140909-MoneyTips-Fincon-The retiree-screen Res (FINAL) (This post is part of the “Retiree Next Door Movement,” created by MoneyTips.com. More than 70 personal finance bloggers committed to write about a single issue on the same day to raise awareness.)

When MoneyTips.com surveyed 510 retired and semi-retired persons about their financial habits, I was surprised that just 30 percent considered themselves “frugal” before retiring, whereas 67 percent said they spent “enough to live comfortably.”

Now that they’re not working or working a lot less, the numbers haven’t changed much: 65 percent live comfortably and 35 percent live frugally.

Those numbers should give hope to people who might fear they won’t have the resources to retire. That’s because terms like “comfortably” and “frugally” can mean just about anything you want them to mean.

To some, “comfortable” means buying whatever they want, whenever they want it. To others, it means the option of buying things they truly want, i.e., making very informed choices and saying “no” as often as they say “yes.”

Perhaps you think living “frugally” means mean eating in restaurants as often as at home because you use BOGO coupons or early-bird specials, and taking multiple vacations each year thanks to frequent flier miles and hotel rewards program points.

Contrast that with those who cook almost all their own meals and save carefully to get an annual or semi-annual trip, using trip-finder sites and relying on staying with family or friends.

That doesn’t necessarily mean the first group is rich and the second group is poor. True, it could mean that the former has more disposable income, but it could also indicate a simple difference in personal tastes.


Paying attention to money

Some people are homebodies and wouldn’t take six vacations a year if you offered them up paid-for and tax-free. They truly love where they live and find plenty to fill their days without constant external stimuli.

Others can’t wait to make their next trek. Earlier this week DF and I took a driving trip around Alaska; while in Denali National Park, he overheard a man say, “Next week we’re going to Nairobi.” If I had to guess, I’d bet that Alaska and Africa weren’t the only two places they visit this year.

This is where budgeting can be as important as income. Before retiring, 70 percent of those surveyed lived on some type of spending plan (daily, weekly, monthly, annual). The more attention you pay to money during your earning years, the more you can set aside for the post-work world.

Whether you’re a new college grad or a happy retiree, your everyday dollars bear watching. Free online resources like Mint.com and PowerWallet make tracking your funds bonehead-simple. Having an emergency fund is vital, so build a weekly or monthly automated withdrawal into that budget.

Should an unexpected expense arise, amend a few categories and shift that money toward the whatever-it-is that might otherwise bust your budget. That could mean something as simple as eating one lunch less out per week, or as major as postponing a home improvement project.

Your mileage may vary, obviously. If you really don’t have enough money saved or have extremely high medical or housing expenses, then cutting out a daily latte just won’t cut it. That’s why I personally choose to live frugally rather than comfortably.

But here’s the beauty part: To me, the two terms are not mutually exclusive.


Frugal, comfortable and happy

DF and I have a marvelous life together. We eat well, laugh often, enjoy cultural activities and help our families.

We also cook almost all meals at home, buy many clothes from thrift shops, grow a garden (and preserve some of the result), drive a 15-year-old car, buy foods in bulk, and use rewards credit cards and programs like Swagbucks and MyPoints to purchase many holiday and birthday gifts.

Three to five times a year I travel for business or to visit relatives. I stay with family or in hostels, use frequent flier miles and ride the Megabus.

Are we frugal? Yes. Are we comfortable? Oh, hell, yes.

We have a nice big kitchen (old appliances but they still work just fine) where we enjoy preparing meals together. The living room’s fireplace insert provides marvelous ambiance and nearly free heat (wood from cut-downs in friends’ yards, and once every couple of years we rent a log-splitter). DF’s piano is a gem: He loves to make music and I love to listen. Our library has two comfortable armchairs where we talk, read and listen to the radio.

And I defy you to find as delightful a bed as ours, clad in cozy flannel sheets and comforter that smell of the fresh outdoor air in which they were dried. DF got it for free because somebody wanted to upgrade a practically new queen-sized bed to a king-sized model. The sheets were on sale at Fred Meyer and we had a coupon for 20 percent off. I paid $5 for the comforter at a rummage sale in 2004.


Things that truly matter

So don’t look at frugality as a life sentence in NoFunEver-Land. Instead, think of it as the road map to freedom. Frugality doesn’t mean you can’t spend money. It means making sure you get top value for every dollar.

It also means spending intentionally, not mindlessly. Both before and after you retire you should view potential expenditures in terms of their true benefits to your life. Not insisting on having every single thing you want the same day you want it means that later on you’ll be able to get the things that truly matter.

Incidentally, this can mean “next month” as well as “after I retire,” since frugality can let you do things like start a business, pay cash for your next car, save for a down payment on a house or help a child through college. In other words, options. Flexibility. Freedom.

(Note: The survey findings plus input from a number of PF bloggers will be published as an e-book called “The Retiree Next Door: Successful Seniors’ Surprising Secrets.” Pre-order before Sept. 30 and you’ll get the book for free.)

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  1. Love this post, especially the sentence “DF and I have a marvelous life together.” So happy for you.

  2. Great article – I really enjoy your writing.

  3. I’d love to be in the position to have six paid-for trips offered to me. What a luxury!!

    You always make such good points. What is frugal for one person (giving up meals out and vacations) might not work for another. You have to make the cuts where it makes sense for you, and if you aren’t happy/able to deal with the cuts you make, then they won’t be sustainable.

  4. What a good article! I share your appreciation for the woodstove insert….so much so that we have two. This will be year eight without burning home heating oil. We have a full tank but burning wood is far cheaper and IMHO greener. Speaking of green…I’m with ya on buying clothes at the Goodwill. Just read a frightening fact when looking for the average life span of a T-shirt. It seems, to produce ONE cotton T-shirt it requires a ridiculous amount of water (700 gallons) and over 1/4 of the pesticides used in the US are applied to cotton crops. By buying the discounted T-shirts at Goodwill we are easing the strain on the environment… I’ll never look at a T-shirt the same…LOL

  5. Ro in San Diego

    I enjoyed this article but I enjoy most of your articles.

    I am facing retirement in about 10 years and think it will be a comfortable retirement. I’ve been living frugally for the past 6 years and am finding it a good fit for me and my family. It gives me the ability to help family members who are struggling and donate to a few local charities with some regularity as well as beef up my retirement and emergency savings accounts.

    • Donna Freedman

      I have no doubt that yours will be a comfortable retirement, because to paraphrase Oscar Wilde you know both the price and the value of everything.

  6. Love this post, Donna. It is all a matter of perspective, especially when you consider that our idea of living the “frugal” lifestyle seems like abundant wealth compared to most of the world. We are so blessed! I live frugally (and comfortably) and I am incredibly blessed for all that I have when many would consider my living to be sub-par.

  7. Donna,

    When I click to pre-order the site will not allow me to scroll down to add my information. Is there another way to that I could order?

    Thank you,

  8. Great post, Donna! Thanks for sharing.

  9. Diane C

    “Road map to freedom.”
    You have a lovely talent for stringing together words, but this takes the cake. Amen, sister!

  10. Great post! I preach frugal living frequently. I always quote Dave Ramsey when advising my young clients – “Live like nobody else now so you can live like nobody else later”


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