One of my biggest problems with retirement planning is that it’s done backwards. The traditional method goes something like this…”Mrs. Smith, you have $400,000 in your portfolio, thus you can withdraw $16,000 a year and not worry about running out of money. Isn’t that great!
To which Ms. Smith says “but, I need $50,000 a year.”
The advisor then responds by suggesting other ways they could get to a closer amount of withdrawals from the portfolio.
All the while, it turns out Ms. Smith has significant waste in spending that, if she were to focus on, would reduce her income needs to $40,000 a year!
Remember this folks, it’s the SPENDING that should drive your retirement planning. Not the income your portfolio can produce. The income you need is of utmost importance. So, we have to define what that is…and then find ways to reduce it.
In this podcast, I discuss 3 easy ways to reduce your spending.
1. Change to LED light bulbs
2. Insulate your house
3. reduce insurance cost
Get your home insulated. Around the windows, doorways. Go into your attic where the light fixtures are. Have some heavy insulation sprayed into your crawlspaces and attic.
Remember, cold air chases warm air. So, in the summer when your air conditioning is on, the cool air in your home is trying, desperately, to escape to the outside where it’s warmer.
In the winter, when you’re heating your home, the cool air is trying desperately to come inside. The cool air wants to be warm too!
So, creating barriers that makes it harder for the cool to mingle with the warm is what we want t accomplish.
Lastly, if you have life insurance, when was the last time you actually checked your cost?
Can you reduce your expenses? Well, I did when I dropped weight and greatly reduced my triglycerides. I read Gary Taubes book and that changed everything.
Here is my article on why you need to understand your life insurance.
Hope this podcast helps. Comments are always welcome.
Song of the day:
Black Sabbath – Into The Void