Retirement Planning on a Low Income — Retirement Life Can Still Be Fun!

There is a lot of misinformation coming from financial institutions and the media about how retired people with low incomes can't have much enjoyment in retirement. Perhaps these "experts" on retirement should check out some research performed by Claritas, the organization that classifies American neighborhoods demographically for marketing purposes.

One of the groups classified according to the Claritas PRIZM system is called the Hometown Retired. There are just over 1,200,000 Hometown Retired households (1.11%) in the U.S. They have an annual household median income of only $26,000, much lower than the national median income. Almost a third of these households are renters. If they own their own homes, their houses are aging – half were built before 1958. The value of their houses or condos is a far cry from the national median value of houses and condos.

Because most never made it beyond high school and spent their working lives at blue-collar jobs, Hometown Retired households’ retirements are extremely modest from the financial point of view; typically they get by on social security and modest pensions. Despite being below the national average in income and assets, most Hometown Retired households don't consider themselves poor, however. One of the reasons why this group is relatively comfortable financially is because the majority live on the fringes of large cities. Here it costs less to live than it costs to live in the cities themselves.

Hometown Retired households are comprised of retirees, two-thirds of whom are over 65; nonetheless, don't assume that these people don't do much more than hang around the house and watch TV all day. On the contrary, the typical retirees comprising Household Retired households are just as busy as when they were working full-time. Best of all, they are enjoying retirement.

How do these retirees get by financially and enjoy themselves on their low incomes? According to Claritas, Hometown Retirees shop at Woolworth's or a reasonable substitute such as Wal-Mart. They use lawn maintenance services, belong to a veterans' club, drive a Chrysler Sebring car, eat Wheaties, and own a microwave oven. They buy Firestone tires, heavy rock music, and rechargeable batteries. They dine at the places such as Golden Corral.

Hometown Retirees spend a portion of their time vacationing on bus tours, trying to quit smoking, bowling at least 20 times a year, and partaking in karate or martial arts. They are also collecting stamps, playing cards and chess, volunteering for political causes, shopping on the Internet, and drinking low-alcohol beer. Hometown Retirees are reading True Story, Discover, Audubon, Field & Stream, Hunting, Soap Opera Weekly, and Ladies Home Journal magazines. They are listening to easy-listening, nostalgia, and soft-contemporary music on the radio. And when they find time for it, on TV they are watching soap operas, the Montel Williams Show, the CBS Sunday Night Movie, the NCAA swimming and diving championships, Macy's Thanksgiving Day Parade, and the NBC Nightly News.

The real gem of information that Claritas gives us is that the large majority of Hometown Retired households isn't complaining about not having enough MONEY to do the things they want to do. Indeed, their biggest complaint in life is not having enough TIME in the day to do all the things that they want to do. Above all, hometown retirees prove that just because you are a retired person with a low income doesn't mean that you can't have fun in life.

Four Retirement Quotes to Help You with Your Retirement Planning

Retirement is like a long vacation in Las Vegas. The goal is to enjoy it the fullest, but not so fully that you run out of money.
— Jonathan Clements

Your best purchases in retirement will turn out to be the ones that you never made.
— from How to Retire Happy, Wild, and Free

Retirement is when the living is easy and the payments are hard.
— Unknown wise person

The question isn't at what age I want to retire, it's at what income.
— George Foreman

Early Retirement Means a Well-Earned Casual Lifestyle

Betty Sullivan, 69 at the time, was one of the Miami Beach retirees featured in Marian Marzynski's PBS documentary My Retirement Dreams. Unlike some retirees, she has had no major problems dealing with retirement.

Before Betty retired, she was an administrator at the Department of Animal Pathology at the University of Miami for 17 years. Prior to this, she and her husband owned an appliance and sewing machine store in Amherst, Massachusetts. To Betty, retirement was a liberation from years of tedious responsibilities associated with work and family. "Before I left," Betty stated, "some of my co-workers had warned and joked about the perils of retirement: boredom, imaginary health problems, lack of purpose, and possible depression. None of these things has happened to me. Why? I exchanged a grueling 9-to-5 routine for a well-earned casual and carefree lifestyle."

Like the other self-actualized retirees of this world, Betty found that retirement can be an enjoyable time in life. She added, "Do I miss the challenge of the workplace that had once been so much a part of my persona? Heavens, no. My days are filled with healthy activities — swimming, working out at the gym, shopping, bicycling, taking classes such as writing, art, and yoga. In the evenings there are movies, concerts, dining and dancing. Soon, I may do a little traveling. And you know what? If I don't feel like doing anything at all except lounge around my apartment, I'll do that too."

"There are lots of good programs on late night TV," Betty continued. "In fact, I feel like having a snack. Maybe I could hop in the car and scoot over to the 24-hour diner for a hamburg. You know what: This is actually a good time to catch up on my laundry. Who would be using the washing machines in our building now? And after the clothes are cleaned and dried I'll put a ton of cold cream on my face and nestle down in a soothing bubble bath for a half hour or so. Maybe I'll be sleepy by then, but if I'm not, it's OK. No problem."

10 More Great Reasons to Take Early Retirement

Here are 10 more reminders why retirement can be the best time of your life.

1. You can spend winter in Florida, Arizona, or Hawaii.
2. You don’t have to wait for a bus on a subzero January morning.
3. You get to set your own agenda.
4. You have fewer headaches because life is simpler.
5. You can have a lot more variety in your life.
6. You don’t have to report to a boss about your actions.
7. You can go on a vacation when you want to go and not when your employer says you can.
8. You have more time for more friends in your life.
9. You can put more time into creative pursuits.
10. There are no co-workers to get envious of your accomplishments.

Clearly, retirement can be the best time of your life. Always keep in mind that you are not retiring from life, just a job. The key is to make retirement the beginning of life, not the end!

Retirement Quotes of the Day

A gold watch is the most appropriate gift for retirement, as its recipients have given up so many of their golden hours in a lifetime of service.
— Harry Mahtar

A happy retirement: Research reveals it's how you manage your time and money that counts, not just how much you've got.
— Walter Updegrave, MONEY Magazine senior editor

Retirement Planning Based on Leisure

Most people feel that there will be no shortage of things to keep them busy in retirement. Although many people have difficulty filling their days with activities, others, indeed, end up just as busy in retirement as they were in their career days. Surprisingly, a few people even succeed in being busier.

The time available for marital, personal, social, creative, and family activities expands considerably when the hours previously taken up with full-time employment cease. Even so, it's all too easy to end up with a less than satisfying mix of this extra free time. How you manage this time is just as important as when you are in the workforce.