Retirement Planning Dilemma

By Roger Nusbaum | August 14, 2008 | 1:03 PM | 2 Comments

Occasionally I like to write about retirement planning issues. The topic is interesting and important. To be clear I am not a CFP, hopefully this sort of thing is taken as a common sense or hey that's a good idea sort of thing.

A couple of months ago we had to replace two of the tires on our pick up truck. It cost $378. Last month we had to register that same pick up, it cost about $400. Next month we have some repairs (general maintenance) to do on our SUV that I think will be around $500.

One aspect of retirement planning that gets overlooked, especially when people do their own plan, is one off items that come up but can't really be budgeted for.

Car stuff is just one source of these expenses. Do you have pets? We have four dogs. One of our dogs needs to get her teeth cleaned once a year. Ever hear of anyone taking their dog to the vet because the dog ate some rocks? One dog we had needed a partial tail-ectomy. Occasionally non-serious things with pets come up but they must be tended to and vet visits are not cheap.

What about fixing things around the house? If you are moderately handy you can fix the little things yourself and you are only out the cost of the parts or equipment. If you have to pay for someone's time obviously the cost goes way up.

Look in your Quicken. Over the past year, longer if you go back that far how much are you spending on one off items like this? These things will not disappear after you retire. So in addition to things you can reasonably plan for you have to realize there will be things you cannot plan for and leave some sort of cushion in your budget/planning.

Unfortunately I don't have a real solution just a philosophy of how we try to live our lives. Live below your means, save more than you think you need to and plan on doing something after you retire to generate income (I have a 77 year old neighbor who gets all the backhoe work he wants and makes $60 per hour, so I am saying anything goes here). 

To be clear, despite the comment above, this is not a pitch for hiring a planner, and obviously planners miss things too but I would like to think that someone in the business would miss less than the do-it-yourselfer starting from scratch.

Good Advice - Sorry About Your Dog Sir! The only problem is American's don't save!!! They are terrible at saving. The Asian economies seem to much more prudent "savers". The tail-ectomy is definitely one of those items I personally could not budget for. Submitted by Anonymous (not verified) on Thu, 2008/08/14 - 1:29pm » reply |