A young man in Home Depot asked me the other day how I liked retirement.  “It’s pretty cool” I said.  “They send you money for not working!”   (Not that I didn’t earn that money and put away for it!)   “But how do you live on so little money?” he asked.  “Planning for retirement starts at your age” I told him.

First of all, we live on two Social Security checks and one small pension for our monthly expenses.  We can do this because we made a plan, some 30 years ago, to be completely debt free before we retired.   No mortgage, paid-off vehicles, paid off RV.  We also put money in our tax sheltered annuities – a little each month.   We draw from that for major vacations or major expenses, such as a new roof or medical bills.  Our monthly income from SS and that small pension pays our Medicare bill and supplemental insurance, food, gas, property taxes and insurance, utilities.   If we want a new TV or home improvement, we save for it.  We eat out once a week and still make yearly improvements on the house.  We are warm, dry and fed.

We love our airmiles!

We love our airmiles!

Another plan we made is to put absolutely everything on our credit cards that earn air miles and pay it off every single month.  Those air miles have provided the major expense of round trip airfare for some amazing vacations.  We’ve been to Europe several times, Disneyworld,  New Orleans, and we are flying Business Class to France sometime next year.  The trick to using the credit card, however, is to not forget that this is still budgeted money.  When we travel, the hotels are paid for in advance (out of our saved monthly income), as is the rental car or rail passes.  The only expenses we have is food, attraction fees and souvenirs – but we don’t bring much home.

Planning for retirement, setting goals, and sticking to the plan has been our key to making this all work.  It hasn’t always been fun, but it allowed us to live quite comfortably within our means.

 Photo By 401(K) 2012 via StockPholio.com