Life Expectancy in Retirement

Source: The Economist.

Citizens all over the world now spend about twice as many years in retirement as they did a generation ago. This is all well and good, except on the whole they have failed to save enough to support themselves in retirement and expect government to provide them with income and healthcare. See my previous posts on Social Security and Debtor Nations.  Is anyone surprised world governments are facing serious fiscal problems?  Or that in the US politicians are proposing even more entitlement programs to fix the fiscal mess the current set of entitlement programs have caused?  Wasn't Einstein's definition of insanity: doing the same thing over and over again and expecting different results?

Kiplinger Retiree Guide

Each year Kiplinger Magazine publishes their retiree guide. Though I am 10 - 15 years away from retirement (if there will be such a thing in the future), it doesn't hurt to do a little advanced planning.

In no particular order, my criteria in selecting a place to retire includes:

1. Reasonable real estate prices.
2. A mild climate that includes the possible of year-round outdoor activities, such as golf and hiking.
   
3. Top-notch medical facilities within a 100 mile radius.
4. Numerous cultural activities within the community, including restaurants, nightclubs, playhouses, art-galleries, a major university nearby, and colonies of artists from all disciplines.
   
5. Low to no state income taxes.
6. Low to no state estate taxes.
7. Low to no state sales taxes.
8. Low real estate taxes.

I'm sure my wish list will change and expand as I grow closer to retirement, and actively begin to research and visit potential locations. Some states that appear attractive to me right now include many of the usual suspects:

1. Delaware
2. Florida
3. Nevada
4. Texas (especially around Austin)
   
5. Arizona (because I've always thought it would be cool to live in Sedona)
   

I'm not looking for places with high state taxes and lots of state provided services. I want to preserve my capital to use as best I see fit, whether it is for my own personal pleasure or to give to causes I believe in. I want to make sure my family is provided for so they can live free from financial worries. I want to do good for my community as an interested and concerned individual. Such are my simple-minded dreams. I'm sure there are other retirement destinations to research beyond my current thinking. What other places should I consider?

Social Security Cost of Living Adjustments Expected to be 0% over Next Two Years

In a surprise to America's seniors, and for the first time in three decades, the government announced that since the recession has held prices down and inflation is currently so low there will probably be no raises in Social Security payouts for the next two years. Since seniors spend a disproportionately large amount of the their income on healthcare cost (which are rising faster than inflation) this represents a real cut in their standard of living. Also, my personal, unscientific observation is that grocery store prices for the common items purchased by most families are slowly rising just as package portions are being reduced.

This should send a clear message for those still in the work force-- you need to take care of yourself and your family, and you can't count on the government. It is my personal belief that due to its financial problems, the government will have little choice but to peg future social security raises below the rate of real inflation. For those under 40, I would advise building their financial plans assuming they will receive no social security benefits. I'm not trying to be pessimistic, just realistic. Most of the government entitlement programs appear to be collapsing under their own weight, and the assumptions of the past may not apply in the future.