First, lets define retirement.
I am of the opinion that retirement means having enough income so that one can cover their basic living expenses plus medical going into their advanced age. This can be accomplished by a mix of living frugally, income from pensions and from taping savings accounts, or in most cases, a mix of all three.
To that end, my plan is to pay off my current house, sell, move out and away from the city, buy a small plot of land, and build my retirement home. This will be as much as possible, an off grid, self sustaining home with a large enough green house to support food production for my wife and I. Wind and solar for power, geo-thermal for temperature regulation, HD antenna for local channels and possible K or c band satellite for entertainment and information. Since this will be paid for, this brings the monthly cost down to a few hundred dollars for taxes and maintenance.
From there, the two largest remaining expenses will be transportation and medical. For transportation, I am currently learning how to make my own bio-diesel from WVO and algae and ethanol / butanol from sugar beats. I figure chemicals and maintenance on the vehicle will add around another hundred bucks.
The biggest expense appears to be medical insurance. In 8 years, I will be able to retire from my company and as one of their benefits, I will / should be able to purchase insurance from them. This of course assumes many things but it is a reasonable assumption. Anyway, my numbers show that the cost will be in the arena of $1,500 per month.
Now, given all of the above, this is still less than my SS payment. So if we assume SS is going to continue to pay out ... then I am “ok”.
However, I do not feel comfortable with that assumption so I a working towards building a small business (specialty farm) that will provide more than the amount that SS does. I am also contributing to my company’s 401K but I am going to treat that as an emergency fund when I retire and not draw down unless needed.
So if all goes as planned my wife and I should be good and even have some extra during our retirement. Which is still a good 20 years off.
“The biggest expense appears to be medical insurance. “
This is what worries me the most and why I’ll probably always work. Even if part time or as the Wall Mart Greeter.
Its just way to expensive and it may deplete the savings way before you pass on.