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Subject:  Re: seeking secrets of a happy retirement Date:  1/18/2005  10:38 AM
Author:  ziggy29 Number:  44100 of 88777

>> Some people may want to live in a small home, garden and spend time with nearby grandchildren - sounds like a very enjoyable and relatively inexpensive retirement. My wife and I, on the other hand, want to spend summers in Italy and the rest of the year in a cute little home near the mountains of NH or VT; winters filled with skiing. We realize we need to save a lot and invest wisely in the next 30 years to make that dream a reality. <<

That's a good point. My parents, for example, are very content with a simple, mostly stay-at-home lifestyle. It suits them well and it's what they want. As a result, though they could afford more, their expenses are rather low compared to their working days (and while raising five children). They have no mortgage, no commuting expenses, only one car, low wardrobe expenses, et cetera. They probably get by on 30-40% of what my dad earned shortly before he retired. They aren't cheap or excessively frugal, but what they want out of retirement lends itself to an LBYM lifestyle.

Others want to travel a lot, have two homes, and live it up. They may well need as much as, if not more than, what they earned while working.

I suspect we're in between the two extremes. And before we determine how we'll invest and save to get there, it's important to determine what we anticipate our lifestyle to be, when we want to start it, and take it from there. Only then can we determine how much we need to set aside to get there, and figure out how to allocate our investments to maximize our chances of reaching that goal.

Our biggest question mark is a tradeoff between standard of living in retirement and length of retirement. Staying the course -- if we do -- we'd probably be able to retire when I'm in my early 50s, but that would mean a rather modest lifestyle. If I waited another decade, it would probably raise the lifestyle standard considerably, but at the cost of a few years of freedom (and not even knowing for sure we'd make it that far).

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