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Retirement and the Cost of Living

Sarah and I have really had some in depth conversations about life, finances and retirement. A few weeks ago I hadn’t even thought of my retirement or about the decisions I’m making now and how they will impact my future. There are times I wish I had a crystal ball, but I’m also excited about the future and what it holds.

If you’re behind, please read these posts.

Bailey: Do you remember what bread and milk cost 20/30 years ago?

Sarah: I think that bread was around R4.00 a loaf and I have no idea what milk cost  although I used to buy the baby sized bottle when I was pregnant in 1988 and it was under R2.00 – apparently we are near 44 times more expensive today Rand for Rand!

Bailey: That is so frightening and I’m trying to imagine how much everything is going to cost in 10/20 years from 2015. I can’t wrap my head around it. Petrol prices, the cost of living is constantly increasing and our salaries don’t always increase to cope with the new cost of living. Now, more than ever, we should be saving.

Bailey: How do you treat yourself now in comparison to when you were younger?

Sarah: This is funny! Think “sensible shoes.” The platforms and high heels don’t come out very often now. From a fashion and dress perspective, you buy for usefulness and quality and quite a few of my friends take a garment “out” i.e. give away, before purchasing something else – so our wardrobes are downscaling.

I take far better care of my skin – being much more aware of skin cancer than when I was young.

I try to avoid rushes and pressure situations like not driving in peak traffic times.

I give myself more time to read and write letters to older family members who may not be active on the Internet.

I forgive myself if good intentions don’t turn out the way they were intended – I don’t loose sleep over people in a negative space.

I set more realistic goals for myself and for the projects I undertake.

Bailey: Thinking back… what financial sacrifices should you have made 20/30 years ago… would you have done anything differently?

Sarah: I should have gone back to full time work sooner after my divorce, but my children needed me then, so maybe I lost a few years for retraining and up-skilling before I did go back to work.

Bailey:  Do you see yourself ever moving to a retirement home?

Sarah: Yes, for security and companionship if something happened to my husband and we couldn’t live independently any longer  – there are retirement homes where you go in at an independent living level, and gradually move into fully assisted living when you need it.  Unfortunately, the world over, elderly people are terribly vulnerable to fraudulent acts and theft.

Bailey: I can’t imagine you and Bruce ever leaving your beautiful ocean view apartment, but I suppose one has to be realistic the older we get and what we might need help with.

Did you ever get sound financial advice?

Sarah: Yes, I did – I was fortunate to own my own property, and saw financial growth from improvements I did to it (at the cost of having disposable income) when it came time to sell.

Bailey: Is there anything else you think we should add in to do with challenges and what younger people don’t think about when it comes to retirement and the choices made?

Sarah: Yes, look at the opportunity cost of taking a trip or putting the money into a share portfolio or upgrading your home.  It’s vital to save and it’s never too late to start.

You can follow more about the #FutureFWD project on the Facebook page.

I can’t believe this project is almost over. The final piece comes next week. I feel emotional about it. This has been absolutely eye opening and life changing.

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