Wednesday, April 22, 2009

Retirement Plan B and C and D...

I read two articles on MSN Money within days of each other. The first, Rescue Your Retirement
offered the suggestion that people who are ready to retire and who lost a large amount of their retirement nest egg in the market could simply sell their big expensive house, move somewhere less expensive and use the extra cash to replace what they lost in their retirement account. Gee, so simple.

The second article, Seniors Crushed By Housing Crisis talked about people who are ready to retire who were counting on using the equity from their home to fund their retirement. Either they planned to move but can't sell because of a slow market or their home has lost so much value that they can't afford to move to the place of their dreams.

So, if you didn't plan on using all of your financial resources, such as your house, for your retirement, then you are still in good shape. If you did plan to use all of your resources then you are out of luck because you can't afford to retire now without doing something drastic like moving in with your kids or living in a trailer park...unless, of course, that was your original plan and then you might not even be able to afford that!

A better plan, it seems, should have lots of alternative retirement plans. I am not counting on social security or the sale of my property in my retirement plans. I am counting on my 401k and income from my rental house. If my 401k crashes (like it did last year) and my rental house goes vacant (I hope not!) I can still sell my property and move in to a trailer park. It's better than nothing I guess.


Over the Cubicle Wall said...

My backup plan depends heavily on working longer than I want to. I don't like to think about it much.

Daizy said...

Or win the lottery, or marry in to money :P So many options!

Over the Cubicle Wall said...

Well, I don't play the lottery, and I don't know any rich single women that would be interested in marrying me, so I am back to the work thing :)