HOW TO RETIRE WHEN YOU ARE BROKE!
Retiring broke or with very little money behind you is more common than you think. There are many reasons why this can happen to anyone. Maybe a recession hit harder than you thought it would, as in my case. Or perhaps you have been so busy earning a living but failed to actually make any real money, as is the case of so many self-employed folks in the UK. Perhaps Illness or Stress has dealt you a killer blow and you need to get off the the Tread-mill as soon as possible for your own well-being.
AKA – How to become the “Mexican Fisherman”.
Whatever your reason, I hear of more and more people finding themselves in the situation where they are forced to retire or without a job and nearing retirement age. Through no real fault of their own, things have not panned out how they originally planned and they find that they have little or no savings or investments. They may have little in the way of equity in their property. Often they are facing the prospect of being in their sixties and still with a mortgage around their necks.
This can be a serious problem if you cannot get a hold on things and find a way through it. Here you will find a few tips and tricks that everyone finding themselves in this situation can do to move forwards from the impending doom that they are facing.
Of course the more collateral you have, the easier retirement is going to be but by following these principles anyone can improve their retirement immensely. You may be lucky in that you are still working for the time being so that will ease the pressure and urgency. But if not, then you need to act now. Yes, today.
Get a grip on reality and start a new life today
The first thing to do is to get a grip on what is actually going on. How badly is this situation going impact your life. Then take steps to rectify things. At this stage it is all about money. Or the lack of it! You clearly cannot carry on the way you were. So, the prime thing to concentrate on is how to stop the little money you have from slowly seeping out of the bottom of your bucket!
This means reducing as much of your outgoings as possible. Make a list of all of the expenses you have. Split this into two. List one is expenses that are absolute necessities to live. List two is all of the expenses that can be considered not necessary to live.
We’ll look at how we can start and fill the bucket up again later. But we’ll do this with as little amount of work as possible!
Look at what you already have
Make a list of how much money you already have or can muster up. Try to think of everything that you own that if sold would bring some money in. Split this into two lists. Need & Don’t need. Now you have an idea of your true financial worth. Hold that thought for the time being…
Make a Plan – Now!
Come up with a plan to remove all of your expenses that are not necessary. The plan is easy to implement – Just STOP paying these expenses. That’s it, just stop ’em! You won’t die, so just stop them today! That could be a sizeable sum you can save immediately. And don’t worry too much at this point, you can introduce a few of these luxuries into your life if you feel that you still need them once you embark on your new life. But for the time being, just turn every expense off that you don’t need.
Reduce your expenses and work towards your new life
Now it is time to organise your necessary expenses. Importantly, it is time to think about how you can reduce these expenses.
Perhaps the biggest expense in retirement is where you live. Renting in the UK or paying off your mortgage can sap your collateral rapidly. This is when you need to look at options like the following.
- DOWNSIZING
- SHARE YOUR HOME & RUNNING COSTS
- RETIRE SOMEWHERE INEXPENSIVE
- RETIRE OVERSEAS
- BARTERING & TRADING
- DISCOUNTS FOR OVER 60’s
How to retire even when you are broke!
Downsizing
This is going to help enormously to your outgoings. One downsizing plan is to consider Mobile Homes. There are thousands of suitable Mobile Home or Holiday Home Parks the length and breadth of the UK. However there are a few things to look out for when embarking on this plan. I hope create an article on this subject alone in the future as it is quite involved.
However, for those of you who are faced with retiring broke, which is what this article is really all about, this is a good way of living on less!
Firstly, you need to know that in the UK Holiday Homes are NOT subject to Council Tax as they are predominantly used as just that, a “Holiday” home and not intended to be lived in all year round. You do however, need to have another “Official” address. This can perhaps be a family member. That way you are still “In the system” as it were but you can spend most of the year technically “On holidy” in your Holidy Home.
The down side of this can be the length of time that the park closes. A lot of parks in the UK, for example, close in February. They can close for anything from around two weeks, right up to three months. But anything up to a month can be acceptable, as you can go and stay with family or friends, or indeed actually go on a holiday to a warmer location like the Canary Islands for a month! This of course costs money to do, but the money you have saved in not having to pay Council Tax can be offset against this, so that helps. And you are not generating any heating and lighting costs in your mobile home either.
Mobile homes these days are a far cry from the static caravans of yesteryear. Particularly when they are manufactured to BS3632 which is a full residential standard. This means that the insulation is very good even in the depths of winter in the UK. There are four main standards or types of holiday homes to look out for starting with a basic caravan with summer insulation only. Then there is a caravan with “extra” insulation packs which helps in the colder months but is not as good as the Luxury Caravans with BS3632 standard. Or then you have Luxury Lodges and Park homes which are both built to this full residential standard.
Careful searching and research could source a second-hand static caravan unit already sited on a park from around £25,000. Brand new units of any quality start from around £45,000. To learn more on this subject check out my link below.
LINK TO “Cheap Lodge Living” HERE
Share Your Home and Running Costs
Think about renting a room or even a section of your home out. Simply putting the word out there amongst friends and family could soon bring a likely candidate knocking at the door.
If you own your own property there should not be any problem but if you rent, then you would need your landlord permission ofcourse.
Sharing your home with someone else can sometimes bring its own problems especially if you have spent sometime on your own. It can be a massive change and is not suitable for everyone. However, it can make a remarkable difference to your monthly outgoings. In some cases slashing expenses in half! You my want to consider doing this for a short period of time only. This will help bide some time until you can put other plans into place, moving forwards.
If you decide to do this, you must ensure that you set boundaries and establish rules up front. Important issues like smoking and drinking, whether you allow pets etc.
You should always enter into a legitimate “Rental Agreement” even if you know the person really well, like a friend or member of your family. It will save problems later.
Retire Somewhere Inexpensive
With little or no retirement savings, it may pay to retire somewhere else in the UK. Move up North! The further north one goes in the UK other than some of the major cities, can be lots cheaper to live. And with reasonable transport links it should not be too difficult to vist family and friends you left behind. It is also great to meet and make new friends too. Good research could find you the perfect place to retire.
Retire Overseas
Retiring to another country can often be a great option if you are reasonably healthy. It can provide an exiting adventure and stretch your budget out at the same time. Many cheap to live in countries also have excellent health care and wonderful first world hospitals. You may also find that many of these health care professionals are either English or English speaking and were educated at some of the finest Teaching Hospitals in the UK or US.
You will still have to be careful with your money but the Great British Pound can still go a long way in some countries like Thailand, the Philippines and even Ecuador or Panama. Of course some of these countries do not allow you to purchase property there but with the lower cost of renting, you can still live comfortably.
It is all about reducing the cost of living.
Bear in mind that moving to another country will involve relocation expenses, but this can be quite low if you are only taking a few suitcases and a little extra luggage. You probably won’t need to take any furniture, as the simplest thing to do would be to rent out a furnished property. In any case, once you have sold your furniture in your home country, you can buy new at a fraction of the cost of the UK. Starting again in building a new life and personalising your surroundings in the way you want can be most rewarding if you are the adventurist type.
One thing you need to check, is whether you can still receive your Social Security or Pension payments in that country. Many countries do but not all!
Bartering and Trading
Back in the day, Bartering was seen as the norm but we tend not to do it so much nowadays. Well now that you have retired, you can use some of your time to offer services to local businesses and neighbours which can be exchanged for other goods or services. This is a great way to reduce your expenses.
Chores like Mowing the lawn, Walking your neighbours dog, Helping out at a local Farm Shop in exchange for fresh produce. Some of the large stores or conglomerates won’t be interested but often smaller businesses are up for it. You get the idea anyhow. It is all about being savvy and thinking outside of the box.
You can trade your time, your tools and equipment or any gadgets you own. Keep a notebook with all the trades you undertake and cross them off when they are returned or visa-versa. Making a list of all the tools and gadgets you own and swapping the list with others enables friends and neighbours to borrow from each other instead of buying or renting.
Check out Discounts for over 60’s
You would be surprised how many discounts you can get in the UK if you are over 60 years of age. Don’t be afraid of asking for them. Virtually everywhere you go on a day out, you can get “Concession Entry”. The silly thing is, if you just go to the pay booth and offer your money and ask for a concession ticket the person behind the counter won’t even question it. My wife and I do I all the time.
- ASK – WHEREVER YOU GO THAT HAS ADMISSION CHARGES
- SOME SHOPS OFFER “OAP” DISCOUNT
- HAIRDRESSERS
- TRANSPORT COSTS
- GARDEN CENTRES OFTEN HAVE DISCOUNT DAYS
- DISCOUNT DAYS AT GARDEN CENTRE & OTHER CAFES
- PUBS HAVE DISCOUNT LUNCHES – SAME FOOD – JUST CHEAPER!
Don’t forget Free Eye tests and prescriptions. Don’t hate your age, embrace it and start saving money.
LOVE Living Life on Little!
If you can apply a little creativity to your thinking, you would be surprised just how little money you can get by on. It is a matter of changing your current ideas and way of life but this doesn’t always mean suffering or settling for second best.
Remember the Mexican Fisherman?
Well if you haven’t already, you should watch my video The Story of the Mexican Fisherman as it puts life into perspective in some ways.
Once you analyse what it is that you are actually searching for in life, you may just realise that you have actually found it! There is definitely substance in the old adage “The best things in life are free”. Having more time to do things, spending time with your family and friends doesn’t always mean that you have to spend a fortune. Investing some of your new-found time in learning new skills and finding new hobbies that can actually pay, can be rewarding in so many ways too, it is your life and you should live it to the full. Enjoy it. Work only to live and don’t continue to live just for the purpose of going out to work!
Filling the bucket up again
Once you have got your new life underway you need to look at how to fill the bucket back up again. This is where it gets interesting. When I say interesting, I mean enjoyable and interesting. You should have more time on your hands by this stage and perhaps eager to find ways of filling the bucket up. Of course you don’t want to be doing too much in the way af work. You need to be looking at ways to earn money without working or for doing very little work.
The aim at this point is to establish as many “Passive Income” streams as possible to fill the bucket. Now you may be an Old Codger but it is never too late to learn new tricks. It is time to embrace the internet and technology. Don’t worry, there are loads of tips and tricks that I know to make this a painless process. You are already halfway there by virtue of the fact that you have found and are reading this!
Check out my “How To Top Up The Bucket” and “Money Making Ideas For Retirement”. Everything is written in plain English and easy to understand. Importantly, everything is either free or cheap to undertake.
Click the link below to learn more.
LINK TO “How To Top Up The Bucket” HERE
LINK TO “Money Making Ideas For Retirement” HERE