Downsizing and Downgrading… Requirements for Retirement

We’re witnessing the first generation in this country to dread retirement.

In January 2013, an article in USA Today reported that, “More Americans delay retirement, keep working.”  The article began…

Retirement is becoming a more distant dream for a rising number of older Americans, largely because they need the money but also because they are healthy enough to keep working.

According to the Employee Benefit Research Institute, 13% of workers who delayed retirement in 2011 said they did so because of “inadequate finances or can’t afford to retire” and 6% because of “needing to make up for losses in the stock market.”

Let’s see if I’ve got this right… first of all, I think it’s safe to go ahead and add the 13% to the 6%, since “inadequate finances, can’t afford to retire and needing to make up losses,” are synonymous, right?  Okay, so that’s 19% that reported delaying retirement because of the money?  And the other 81% delayed retiring why, exactly?  Because they were healthy enough to continue working?

Yeah, right.  That line should read, “19% said they delayed retiring because of money and 81% lied about their reasons for delaying.”

The data also showed that “more than 44% of workers 65 and older worked full time year-round… 49% of older men vs. 38% of women.  Washington D.C. placed first with 62.2% of those over 65 working full time.  That’s an amazing statistic, don’t you think?  Almost two-thirds of those over 65 are working full time in our nation’s capital?  I’m not sure what to think about that.

Is that because the older folks there need money, or because we don’t have term limits in congress?


Then, about a year ago, in October 2013, USA Today ran an another article about baby boomers retiring, or rather not retiring, saying, “Debt holds many Boomers back.”  Here’s how that article began…

Baby Boomers, forget about retirement. We’ll be working for the rest of our lives.

OK, that may be an exaggeration, but not by much.

We have not saved enough money. And worse, many of us will still be up to our eyeballs in debt when we do retire. We’re just one medical emergency away from bankruptcy…

According to Boomers and Retirement, a new survey by TD Ameritrade, the average Baby Boomer is about a half-million dollars short on retirement savings.  And 74% of Boomers in the survey say they will have to rely heavily on Social Security in retirement. (The average Social Security check, by the way, is $1,230 a month.)

Wow, that’ll sober you up faster than a pot of strong black coffee and a cold shower.  That’s three-quarters of future retirees heavily relying on $1230 a month.  Keep in mind that a decent percentage of those same people are used to spending $1230 a month on car payments.  (Okay, so maybe that’s an exaggeration, but it’s not much of one.)

We’re talking about people with monthly incomes of $6,000 to $16,000 a month, or more… who by the time you factor in lifestyle, kids in college, vacations, today’s luxury imports, et al… struggle to make ends meet every month.  And now they’re going to retire heavily dependent on $1230 a month?  Okay, if you say so, but I’m here to tell you that something’s gotta’ give to survive that kind of budgetary belt-tightening.

You simply can’t take a $75,000 to $100,000 annual lifestyle and pack in into a $20,000 overnight bag without leaving several outfits and a few pairs of shoes behind, let’s put it that way.

Last year, the Today Show/Money also reported on the advent of such a high percentage of 65 year olds not retiring according to any sort of pre-conceived plan…

There was a time when Tom Sadowski thought he’d stop working after turning 65 earlier this year. But he’s put off retirement for at least five years — and now anticipates continuing to do some work afterward. 

In an illuminating sign of changing times and revised visions of retirement, an Associated Press-NORC Center for Public Affairs Research poll released Monday finds older Americans like Sadowski not only are delaying their retirement plans, they’re also embracing the fact that it won’t necessarily mark a complete exit from the workforce. 

Some 82 percent of workers 50 and older say it is at least somewhat likely they will work for pay in retirement.



The show also quoted a financial planner who says he works with those in and approaching retirement every day…

“The definition of retirement has changed,” said Brad Glickman, a certified financial planner with a large number of baby-boomer clients in Chevy Chase, Md. “Now the question we ask our clients is, ‘What’s your job after retirement?'” 

I don’t know about everyone else, but if I had a financial planner who asked me that question, I think I’d be tempted to reply, “I’m considering a second career as a paid hit man who specializes in taking out financial planners who ask their clients that question about their plans for working through their retirement years.”

TODAY/Money also featured the story of a 69 year-old woman who retired and then went back to work a year later…

One such retiree who returned to the workforce is Clara Marion, 69, of Covington, La., a teacher who retired in 2000 and went back to work a year later. She retired again in 2007 but soon returned to part-time work because she needed the money. 

When she first retired, she had about $100,000 in savings, but she has used much of that up. Her pension isn’t enough to pay her bills, and she isn’t eligible for Social Security. So she’s back in a second-grade classroom, four days a week. 

“I’d love to be sleeping in,” she said, “but I will probably never retire.” 


And there you have it… Ladies and Gentlemen… the feel-good sentence of the decade for boomers essentially unprepared for two, let alone 20 years or more of retirement… “I’ll never retire… I’ll just work until I drop dead.”  I hear people say it all the time, as if it were one of the options on some imaginary menu of retirement paths from which we all get to choose…

A. Retire completely.

B. Partially retire, but work part-time.

C. Work until drop dead at desk.

I think people say it because, believe it or not, it makes them feel better about the whole thing.  Like, it sounds like a negative thing at first, but I suppose it’s better than I’m planning on eating cat food for the last 15 years of my life.  So, instead it’s… I know I’m totally unprepared for retirement, but it’s really no big deal, I’ll just work until I drop dead at my desk… problem solved.

Does anyone actually believe that’s how life works out in one’s later years?  One day you’re perfectly healthy and going to work at your regular job, and the next day they find you face down in whatever you brown-bagged for lunch?  People, that’s just not how life goes.

None of us drives our lives with that much precision.  Here’s my own metaphor for this subject…

You start out life with someone driving you around wherever you need to go.  At 16 you start driving yourself around, but for the most part most parents keep you on a track sort of like that Autopia ride at Disneyland.

Then you become an adult… you buy your own car, and start driving your life by yourself.  You learn about the dangers of driving under the influence and to avoid dark, rainy mountain roads late at night, but there are relatively few obstacles on the road, and chances are you do just fine.

Then, you turn 50 and not only do cars start costing twice as much as you remember, but they start throwing all sorts of hazards onto your personal highway… huge potholes and unmarked speed bumps, the occasional 18-wheeler jackknifes right in front of you while you’re going 75 MPH… these are the years when you start to really value dual airbags and the 24-hour roadside assistance program that came with your car’s warranty.


At 65, although physically you feel pretty good, you recognize that you might turn the key one morning and your car will explode.  After 70, whatever it is that happens to you can no longer be classified as entirely unexpected.  And by 70 or 75, there’s someone driving you around again, but this time he’s an illiterate drunk with a suspended license driving a car with bald tires, no turn signals… and brake lines that have been cut.

By 75 or 80, life is hurling fireballs and farm equipment down the road you’re traveling on, while your driver has become a narcoleptic speed freak with macular degeneration and suicidal tendencies.  You may still be providing the directions, but the odds of you arriving anywhere on time and unharmed… make you uninsurable.

You’re not driving your life like you did when you were 30, 40 or 50, that’s for sure… and any illusions to the contrary are laughable.

Retirement today is measured in decades, not years.

At 65, our average life expectancy is roughly 20 years… at 80, it’s still another 10 years… and at 90, it’s almost five years.  But, very few of us will get to choose the “work until we die at desk” supposed alternative to saving enough for retirement, because chances are good that something will happen during those 20-30 years that makes the choice for us by limiting or eliminating altogether our ability to do our regular jobs.

Whatever happens to us to slow us down, may not be permanent.  I know a couple in their mid-60s in which one spouse fought cancer and required 13 surgeries over two years, while a company laid the other off without notice after 25 years.   As you might imagine, for a couple of years things were very hard… to avoid losing their home to foreclosure, they almost exhausted their life savings… but do you know that as of this past year they were both back to work and doing just fine.

And at only 69 and 70, respectively, they still have time for second careers, which is exactly what they need since the value of their nest egg has been reduced to a goose egg.

The TODAY/Money article also reported that…

Increased lifespans and a renewed idea of when old age begins are also fueling more work among older adults. Six in 10 people said they feel younger than their age; only 6 percent said they feel older.  

Even so, according to TODAY/Money, one-third of retired survey respondents said they did not stop working by choice.  Eight percent say they were forced from a job because of their age… and in interviews, survey respondents commonly cited health as well as layoffs followed by unsuccessful job searches. 

Another individual featured in the TODAY/Money article, was laid off from his park ranger job at 62, but he had been planning to stay on the job until he was 70.  After his search for a new job went nowhere, he gave in and retired… almost a decade sooner than expected.  Others told stories where it was their health that forced them into retirement much sooner than they were planning.

One in six retirees interviewed reported having less than $1,000 in retirement savings and 1 in 4 working respondents said they aren’t saving for retirement outside of Social Security. Some 12 percent of those nearing retirement age reported borrowing from a 401(k) or other retirement plan in the past year. Only 29 percent said they had at least $100,000 in savings… as if $100,000 could possibly last beyond the first few years of one’s retirement.

Last, there was the story of Dolores Gonzalez, 57, of Coalinga, California… who said she “expects no luxuries in retirement.”

She’ll be happy if she can simply afford her $2,200 monthly mortgage payment. She used to think she would retire from teaching at 65; now she says she’ll never stop working. 

She had been strained by helping to support her parents. Now she has less than $200 in savings and she worries about sustaining herself in retirement when all she’ll have is a Social Security check. 

“A lot of people don’t save because the cost of living is so high,” she said. “Retirement is not going to be comfortable. It’s going to be hard.”



Let’s stop beating around the proverbial bush…

There’s one of the many older Americans still paying off a mortgage, or at least that’s what they tell themselves they’re doing.  In reality, they’re just trying to play beat the clock, hoping to pay it off before they can’t work for whatever reason and have to either deplete their savings or sell the house.  The problem is that they have terms of 20 plus years and no one can predict what will happen over 20 years.

A long time coming…

Much has changed in this country as related to retirement, but most of what’s changed hasn’t changed overnight.  Over the last 30 years, we’ve seen our investments grow for a few years on several occasions… before being close to wiped out by some new-fangled bubble-of-the-century inspired “perfect storm.”

And while we’ve ridden the treacherous retirement investing roller coaster that our stock market truly is, we’ve also struggled to pay health care costs that since 1978, have gone up by just over 600%, with the cost of college having increased by 1120% since then.

The final nail in our collective coffin was our latest economic meltdown, which not only caused stock markets to crash, but also reduced the equity we had in our homes by trillions.

If we didn’t see this situation related to retirement coming before this, it was surely a case of “willful blindness.”  Not that there was anything we could have done all that differently, so I understand whatever reticence to talk about it has existed, or still exists today.  I mean, even those who saved diligently were pummeled financially this last time around… almost no one came through this last crisis unscathed… and it’s not over yet.  It’s truly proven to be the gift that keeps on giving.

So, what’s the plan, fellow boomers?  What now?


10 Steps to Reclaim Your Retirement Late in the Game


The first step is to understand and accept that from where we all stand… we’re not going to make it… at least, not using the same sort of thinking and retirement rules of thumb we’ve employed in the past.

Although some disagreement exists on the ideal percentages to be used, in general terms, to maintain one’s lifestyle in retirement, one would need to have saved enough so that a four percent annual withdrawal, combined with Social Security would replace between 75 and 125 percent of one’s pre-retirement income.

Let’s say you make $75,000 a year.  At a minimum, you need enough savings to generate $56,250 annually when you withdraw four percent of your nest egg.  So, at an absolute minimum, you’d need to have accumulated $1,300,000 in your nest egg to replace 75% of an annual income of $75,000.

If you’ve earned more than $75,000 annually during your working years, then the amount you need to have accumulated goes up.  If your combined annual household income comes in anywhere near $150,000, then double it… replacing 75 percent of that sort of income would require an accumulated nest egg of at least $2,600,000.

If you’re close to having accumulated any of these sorts of numbers in terms of your own nest egg’s value, then great… keep saving and know that the numbers I’m tossing around are low end estimates.  But, if you’re like the vast majority of Americans at or near retirement age, and the balance in your retirement account is in the low six figures or less, then you’re not going to make it, unless you delay retirement until your 105th birthday… win the lottery… or become a hedge fund manager, I suppose.

Baring any of those things happening… just accept it.  It is what it is, at this point.  And know that there truly wasn’t anything that you could have done to change the outcome that almost everyone is facing today… know that you are far from alone.


Would downsizing your lifestyle to some degree make a significant difference in your cost of living?  If so, then the sooner you realize it, and take some action to capitalize on the savings, the better off you’ll be later in retirement.

Now, I realize that this is often a very difficult step for many people to take.  Sometimes there are substantive reasons no to want to move… school-age children living at home, is probably the most common one I hear, but it could also be proximity to work, or to other family members.  But there are plenty of others that don’t want to think about moving from their current home for purely emotional and very often irrational reasons.  Some believe they’ll never be able to buy another home, and in most cases, that’s just not true.

In general, human beings can have the tendency to overestimate the length or intensity of their future feelings resulting from the impact of some event.  It’s called “impact bias,” and it simply means we’re capable of thinking that we’re going to feel worse and for longer than we actually will, based on changing something in our lives.

There’s also something called “status quo bias” that also affects our thinking, and it’s simply the tendency to like things to stay the same, rather than see them change.

The reality is that we are all far more resilient than we think we are.  Although we often fear or resist change, it usually works out much better than we think it will, and moving to reduce your cost of living may very well be one of those times.

The more important point, however, is that if it would make sense financially, the sooner you do it the better off you will be as a result.  I mean, moving to reduce your cost of living at 80 is fine, but it won’t yield the same benefit that moving at 60 would have.

How to purchase the home you’ll retire in with 50% down, and without being required to make monthly mortgage payments for as long as you and your spouse live in that home.

Once you’ve turned 62, you become eligible to purchase a home using a very different kind of mortgage than you’ve even been offered before… it’s called a “HECM for Purchase,” and you can read all about it on, but here’s an illustration of why I say it’s the only way to go, if retirement is your goal.

Let’s say that you sold your home and cleared $200,000 after costs and your plan is to use the $200,000 to pay cash for your next home, so you’ll have some shot at not working like a dog into your 80s, while hoping to die at your desk.  But, wait.  Stop.  Instead of using the whole $200,000… what if you could buy that same $200,000 home you were about to buy, but with only $100,000 and never have to make a mortgage payment, just as if you would have paid cash for the property?

This way, you get to keep the other $100,000 from the sale of your home… you still buy the same $200,000 home you wanted to buy… but you’re not required to make monthly mortgage payments as long for as you and your spouse live in that home.

Oh, and with the HECM for Purchase program, there’s no credit score or income qualifications… all you need to be able to do is show that you can pay your property taxes and insurance… nothing else.

Why wouldn’t essentially every single American over 62 and facing retirement, do precisely that?

There’s only one reason I can think of… they don’t know about it.  Here’s what it says about the program on HUD’s website…

The program was designed to allow seniors to purchase a new principal residence and obtain a reverse mortgage within a single transaction. The program was also designed to enable senior homeowners to relocate to other geographical areas to be closer to family members or downsize to homes that meet their physical needs.

That’s right… it’s a type of reverse mortgage, so what?  There’s nothing wrong with a reverse mortgage, and there are countless ways to use them during retirement that you’ll never hear the television spokespeople mention.  And don’t say you don’t like reverse mortgages because I’m betting that up until a few minutes ago when you read about this program, you’d never heard about it before, and still don’t completely understand it.  So, how can you have a negative opinion about something when you don’t even know what it is?

(Contact me at if you have any questions or want to talk about this special mortgage program for people over 62 in greater detail.)


There’s no point to chasing a goal that cannot be achieved, because as you increasingly come to realize that you have no chance whatsoever of succeeding, the stress builds… and you stop thinking rationally or carefully, which only makes things worse.

Eventually, you give up on trying altogether, which can lead to irrational, counter-productive and in come cases, the adoption of fatalistic thinking.  Next thing you know you’ve started smoking again and have given up on staying fit, figuring that one way to make it through retirement is to shorten its duration.

The answer is to redefine your objectives or change the rules to the race you’ve been running for most of your life as related to retirement.  And the sooner you start thinking along these lines, the more options you’ll have.

Okay, so maybe the housing meltdown has left you with little hope that your home will appreciate enough to make a substantive contribution to your retirement years anytime soon, but that’s only true about where you live now… it may not be true about other places or other living arrangements.

I’ve spoken with Art Laffer, who was President Reagan’s economic advisor, on several occasions… I even had dinner with him a couple of times when he was still living in La Jolla, California in a million dollar plus sort of home.  But about eight years ago, Art moved to Nashville, Tennessee, where he could pay cash for his home, and enjoy a much less costly cost of living.  And I can tell you from talking to him that he’s never regretted making the move for a minute.

The other thing you might consider is changing the way you view your house… start thinking of it as a four-plex, for example.  You rent out three and live in one.  Done right, and you could find yourself with no house payment for life, and maybe even some extra income too.

Or perhaps it’s time to consider running that Bed & Breakfast of which you’ve always dreamed.  I know a couple that did exactly that, and not only are they succeeding financially, they seem to be having a great time too.


Well, as they say… one man’s meltdown is another man’s Mecca.  (Actually, I may be the only one saying that, but I’m sure someone says something similar.)  This is a big beautiful country, and just because you never thought you’d live somewhere else is no reason not to explore the idea as you contemplate your retirement years.

Detroit has been through some tough times these last few years, but there are signs of a renaissance… green shoots, if you will… and the city and surrounding area does have a lot to offer someone whose retired, especially if they’re interested in community redevelopment efforts.  Plus, it’s MOTOWN, after all… and I think it’s safe to say that the city has nothing but upside potential at this point.

Ann Arbor, Michigan is also popular among retirees, and one of the reasons is that it’s less taxing, you might say. The university there means plenty of entertainment and cultural activities, but additionally all Social Security income is exempt and taxpayers over age 59.5 are exempt from state income tax up to $81,840 per couple, per pension. (Couples over 65 are exempt from an additional $18,255 annually.)

I grew up in Pittsburgh, Pennsylvania, and contrary to what some might think, today’s Pittsburgh is a city of sprawling parks and magnificent wooded beauty. It tops nearly every list for best places to retire. The tax rates for retirees are awesome… public and private pension income isn’t taxed at all!

Average home prices are still under $200,000, and what you can buy for that sort of money is truly unbelievable.  The Pittsburgh Steelers, Pirates and Penguins are much loved by the city’s residents, and with things like concerts in the part, arts festivals, jazz clubs all over the place, an internationally acclaimed symphony orchestra and ballet company… look, it’s just a really nice place to live… period.

Too cold for you in Detroit or even Pittsburgh?  I completely understand.

It’s not too cold in Las Cruces, New Mexico though, which is one of the least expensive places to retire in the United States.  And not only is its climate inviting to say the least, but in addition a local university offers tuition discounts to retirees.

And if Las Cruces’ population of 75,000 seems too small… then Albuquerque, New Mexico is one of the most affordable places to live in the entire country too, and there are no taxes on Medicare insurance premiums, which is nothing to sneeze at when on a fixed income.  Plus, if you’ve never visited Albuquerque, it’s an art lovers destination for the entire South Western U.S.

Then, surrounded by the Arkansas River, there’s Fort Smith, Arkansas, which you might not guess offers activities like wine tasting, watching the city’s symphony orchestra or community theaters perform, along with plenty of golf.  Median home prices are under $100,000… so, that’s pretty cool too.

Charleston, South Carolina is a city steeped in history and noted for its beauty. The town and nearby Hilton Head are huge tourist destinations.  The city’s historical homes overlooking the water are beautiful.  And the state of South Carolina exempts up to $30,000 of any income per couple for taxpayers who are retired.  Plus, couples have unlimited deductions for college savings plans and up to $6,000 for pensions.

And located near the Gulf Coast, Ferry Pass, Florida, is a suburb of Pensacola that’s located close to Pensacola’s shops, restaurants, white sand beaches and art galleries.  Median home prices are around $130,000.

This country may have suffered economically these last so many years, but it’s still got plenty of beauty and opportunity to offer anyone who takes the time to look around.


When it comes to income during retirement, it helps to remember that every little bit helps, that is to say that the value of each dollar in income earned during your retirement years may be worth two dollars earned during your working years.

For example, while you were working and raising a family, bringing in an extra $500 a month might not have seemed like much, but once retired in a lower cost environment, an extra $500 or $1,000 a month can mean the difference between being comfortable and having to pinch pennies.

The reason understanding this new value of a dollar is that it allows you to think about ways to make money that you may never have considered.  For example, something that may not have seemed worth your time while you were working may be totally worth doing during your retirement years.

It might sound crazy, but I know one retiree who started her own baby-sitting service after retiring from teaching in public schools.  She loves kids and loves the work, and although she only brings in $500 a month doing it, it’s $500 that funds her monthly entertainment budget that she wouldn’t have otherwise.

Once you’ve learned to appreciate the contribution made by smaller sums during retirement, you can also revamp your savings strategy along the same diminutive lines.  I’ve written about this topic before, “Tricking Yourself Into Saving A Lot More Now,” but if it didn’t completely hit home last time around, perhaps you might benefit from trying it again.

Basically, I’m trying to tell you that I understand why you don’t save more than you do, and one of the reasons is that you recognize that the amount you could potentially save couldn’t cover much of anything during retirement… so screw it… let’s go to Disneyland, and maybe I’ll get lucky an die before my time.

You tell yourself that as soon as you start doing better, or get rid of some of your bills, you’ll start socking it away at warp speed to catch up, and if that doesn’t work… you’ll just work until you drop dead.

But, meanwhile you could have socked away $10,000 and even though I would agree… that’s not going to matter when viewed along side your current needs… it would cover almost an entire year not working while living in Uruguay.  And maybe you’d love Uruguay more than anywhere you’ve ever lived… you don’t know… you know less about the place than I do, and I only just learned how to spell it.

So, start saving for the cost of living that you’re going to find a way to create in the future, and it’ll feel a lot more productive than it did when you could save all year and not have enough to make more than one or two mortgage payments.


The Internet is offering limitless opportunity for the business ventures of tomorrow.  In fact, it’s impossible for me to believe that every single person reading this couldn’t make more using the Internet if they knew more about the subject, of course.

I can’t think of anything with greater potential for financial reward than learning about the various ways of conducting business online… and since there are plenty of classes available on- and off-line, and since retirees have the time… there’s just no reason to say anything but yes to learning more.

From becoming an E-Bay business to selling your own services online… if you’re going to need to generate income after you’re retired, doing business from your home computer beats being a greeter at Wal-Mart any day of the week, in my opinion.

Don’t worry about what you don’t know… start with learning.  I don’t know exactly where you’ll end up, but I know that learning more is the prerequisite to earning more, so what have you got to lose?  Or, if not online, maybe you’ve just always wanted to own your own business, and for a number of reasons, your retirement years may be the ideal time to do it.

You’re smarter now than ever, right?  You’re more courageous than ever, too.  You more have patience, and you listen better than you did when you were younger as well.  And let’s face it… with the kids grown and out of the house, one thing you probably have more of is time.

It could be your own restaurant, flower shop, limousine service, tutoring service or maybe you’ll buy a franchise.

I think, last time I checked, a Pizza Hut franchise was about $250,000… not an impossible amount of money to put together over some period of time, right?  And Pizza Hut franchisees can make pretty good money, as I recall.  Don’t quote me though… contact Pizza Hut and get the most up-to-date information straight from them.


Where I live we have a weekly outdoor market that takes place on Thursdays during most of the year… it’s called the Fullerton Farmers’ Market and you can buy everything from fruits and vegies to good old kettle corn and sausages while the kids jump in the jump house, and ride on the little train.  For adults there’s even a beer garden, the area I like to frequent more than any other… lol.
There’s a small group of guys there every week selling tri-tip sandwiches for a few bucks and they’re delicious.

It appears that they bought a large portable grill that gets towed behind a car attached to a trailer hitch, and that’s about it… instant community business.  They’re never going to be online or sell nationwide, but that doesn’t stop them from selling 1,000 of their tasty sandwiches every Thursday in my neighborhood alone… I’m sure they attend other outdoor venues on other days.

I’ve sat and watched them for a couple hours at times, and they look like they are having more fun than should be allowed while working.  Everyone knows them at this point, so there’s no advertising involved… they just set up their grill and the aroma does the rest.

I always think to myself… I should come up with something to sell at this market, but I haven’t yet, mostly because I can’t quit my day job and raising a family takes all of the spare time you’ve got.  But, during retirement?  Surely I could offer something to the people who meander around from booth to booth looking at everyone’s wares.

One booth makes the coolest mailboxes, and we bought one that looked like a Dalmatian, and kept it in front of out home during the 12 years or so that we had a Dalmatian.

I don’t know what you’d offer at such a market, but there are consumers of all ages that attend every week, so you’d be limited only by your imagination as to what you could do to make a few extra bucks working a few hours a week.


Just like it’s been difficult times for you and me these last few years… it’s been that way for everyone else too… just like you’re hungry for new opportunity, so are many others… and sometimes finding the right partner is the lynch pin that locks in an organization’s success.

Partners can come from anywhere and take all sorts of forms… they can be individuals or other businesses, and they can often help a start-up by providing capital or access to an existing audience.  I know one retiree that started a limousine service after he retired from the aerospace industry, and his partner became his two sons who started out as drivers, and now run the whole company.

What my friend brought to the table was the ability to buy three limos the first year (I think now the company has close to a dozen), and his rolodex of contacts to whom he promoted the service to get it going without having to devote a single dollar to advertising, except for being listed in the local Yellow Pages.

Another type of partner can provide you with a component used in the manufacturing of your product… they’ll help you grow in order to increase their growth at the same time.  The point is, you don’t have to go it alone in business, there are many potential partners out there, so when you know what you’re looking for… look around.

A Better Way to Work… Custom designed for your retirement years.

The overriding point is that you may want to consider starting your own business in order to have the additional income you need during your retirement years, but without you having to punch a time clock the way you did before you “retired.”

Designing a business for your retirement years is different than designing one with which you plan to raise a family in three key ways:

  1. You don’t need as much income, or as much year-over-year growth.
  2. You want to avoid the sort of businesses that only make money when you’re physically at your desk or minding the store.  You’ll take less money if it requires less time.
  3. You don’t need a company that you can sell at some point… in fact, you could have one that you just give away or just close down when you’re done with it.


It’s worth mentioning that starting any business requires capital… some amount of money that you invest in the enterprise to get it off the ground.  Maybe you need commercial space, phones, a website, business cards and brochures… raw materials used in manufacturing the widgets you sell… whatever.

If you’re starting a limousine service, you’ll need to buy or lease a limousine or two, and perhaps pay a driver and other operating costs like fuel and insurance until your sales cover your fixed costs.  Chances are you’ll have to cover those costs out of your savings, but it’s worth mentioning that there are huge advantages to using a reverse mortgage to finance your new venture.

Funds from a reverse mortgage line of credit do not have to be repaid on any sort of set schedule. In fact, such funds don’t have to be repaid until you sell the home or until both you and your spouse pass on, if that’s what you want to do.

That gives you an advantage over your competitors who don’t have such flexibility built into the terms of whatever loans they’ve had to take out to finance their companies.  It means that you could be the only limo service that doesn’t HAVE to make a limo payment every month, and that means you can offer lower rates than those that do.  You can be the “low price leader” of limo companies in your area… and that is a HUGE competitive advantage for any business.

If you were a flower shop, it would mean being able to offer roses on Valentines Day at $20 a dozen, while your competition is forced to sell the same dozen for $35.  No matter what kind of business we’re talking about, being able to be the low price leader will increase your chances of success dramatically.


I recently wrote a piece about Americans retiring in Mexico, and I found it more than eye-opening as to how far my dollar would go down there, but Mexico is only the tip of the global iceberg for retirees looking for their dollars to go further today and in the future.


Ever consider retiring in Uruguay?  Probably not, when I first saw a reference to retiring there as an American in US News & World Report, I wasn’t even exactly sure where it was or how to spell it… exactly.

Turns out, Uruguay is already becoming a retirement haven for Americans in the know.  It’s known as “the Europe of South America,” with 88% percent of the population being of European descent.  It’s a country with a 98% literacy rate… very good, but inexpensive healthcare… modern infrastructure, the roads are great and the phones work all the time… a low crime rate, in fact it’s the lowest in Latin America… and a high standard of living for little money.  And it’s a very stable country, both politically and economically.

The website says: “If you enjoy visiting Europe, for the great cuisine and culture that you might find in Paris… but do not want to pay Parisian prices, take a good look at Uruguay.”


Apparently, the capital city of Montevideo will remind you very much of any of the major cities in Europe.  And it’s a place where U.S. expats can obtain residency easily.  It’s famous for beautiful beaches that run the entire length of its coast, most notably along the Costa de Oro, a 30-mile stretch of shoreline that reminds many who visit of a 1950s seaside village.

Uruguay’s economy has expanded in recent years despite the ongoing economic woes in much of the rest of the world. As a result, the country continues to draw foreign investors and, increasingly, U.S. retirees.

And can I please show you the money?  The cost of living on the coast in Uruguay is inexpensive by any standard.  A beachfront home in one of Uruguay’s charming Gold Coast towns would be as little as $75,000, with a nice selection available for less than $100,000, so a retired couple could live there comfortably on $1,300 to $1,500 per month, while owning their own beachfront home.


In the summer, the average high temperature is 82 degrees, and in the winter it gets down into the 60s… although it can get down as low as 40 degrees, depending on where you are… any frost, however, is said to be rare.  Of course, I’ve never been to Uruguay.  No, I’m ashamed to say that like so many Americans, I’m capable of forgetting that Central and South America even exist most of the time, and when I picture anything south of the border, it all looks like Mexico in my mind’s eye.

But, I’m embarrassed to admit that and I plan to change my thinking… especially after I read what Doug Wayne, a U.S. expat who has lived all over the world but moved to Uruguay nearly three years ago, had to say in an article on MSN/Money titled, “The American Dream In Uruguay,” that ran back in 2012.  Talking about the city of Pocitos, which is where he lives today, he said…

“Pocitos reminds me of the Riviera or Italy or elsewhere in Europe.  It’s completely self-contained, with little shops and restaurants and its own nightlife. There are shady little parks, and we’re right next to the water. You can walk everywhere; you don’t need a car.”

Yeah, it sounds positively dreadful, doesn’t it?  Why would I possibly want to visit a place like Uruguay, where Americans are retiring in style on less than $1500 a month?  After all, if I’m lucky, I’ll be able to work the rest of my life to pay off a home I won’t want to sell at that point anyway?  And that’s what happens if I’m lucky?

If my luck doesn’t hold, I’m one doctor’s visit away from bankruptcy, and will end up with no assets, and my nursing home tab being picked up by Medicaid?

You know what?  Screw the status quo… I’m ready for a change.


What’s happened to our economy, and to all of us collectively and as individuals couldn’t be described as a bump in the road… it isn’t temporary… and things are not “coming back.”  Asset prices, it’s worth noting, never re-inflate themselves after a bubble pops… no matter what the media says is right around the corner… just ask the Japanese.

Our situation is not going to markedly improve for middle class Americans for a long time, and by that I do mean longer than anyone can forecast with any certainty or math involved.  Oh, we will eventually recover, whatever that means, but think about it this way… we’re in for 20 years of things not getting better all the time, as the Beatles once crooned.

So, if you’re going to wait it out, the only advice I could offer would be to say, buckle up, because it’s going to be one heck of a long and bumpy ride.

The media, it should go without saying, which takes its lead from the government’s press releases, is never going to report such a reality.  The best we can hope for from the “news” is to tell us what happened after it already happened, because to tell us in advance would be to only make things worse.  It’s a lot like one might treat a nation of three year-olds, if you think about it.

But I’m not three… I’m 53, and after watching our economy wither over the last seven years now, I’m sure as heck not going to spend the next 20 years holding onto stories of how things used to be back when I could get a HELOC on the back of my cereal box, and my home’s value was rising so fast that it barely made sense to keep going to work.

Denial is not a river in Egypt… it’s a dangerous drug that if you’re not careful will snatch your attention away from seeking out new opportunities, leaving you broke and on your couch with your remote control in your hand searching for the re-runs of “The Apprentice” you’ve recorded.

Don’t Just Do Something… Sit There.

I’ve decided that this time around I’m perfectly happy to miss the bottom, so until I can actually see that things in this country have been recovered for a couple years, I’m not going to be lulled into a optimistic stupor by CNBC talking heads who have never seen a market that didn’t represent a great time to buy.  Until I can feel the economics change, I’m going to change my strategy for creating a safe financial future for my family.

The last century was called, “The American Century,” for what should be obvious reasons.  It was the century that saw the U.S.A. grow to become the world’s only true superpower.  The Dow started at around 66 in 1900, and finished right around 10,600 at the end of 2000, which represents annual growth of about 5.3 percent.

If you think this next century will be like the last one, economically speaking… and therefore you think the Dow will continue to post the same 5.3% annual growth as it has over the last 100+ years… well, that means that you’re forecasting the Dow to hit TWO MILLION by 2100. 

That’s DOW 2,000,000 just 85 years from now?  I don’t even think the hopeless cheerleading optimists on CNBC that would say that’s going to happen.

I do think, however, that this next century might just become known as, “The Central and South American Century,” and I want to know more about the opportunities that exist down south, so I don’t miss out on what goes on in the other Americas.

Want to blow your mind right now?  Click this link to “Panama City” in Google Images.  See that?  It looks like a cross between Manhattan, Dubai, and Aruba.  And as you might recall, we used to manage a certain canal down there, so most everyone speaks English.

Now, tell me why you wouldn’t want to at least visit Panama someday?  It sure doesn’t look like Tijuana in the photos, now does it?  (LOL)



  1. I don’t care where you spend your retirement years, whether you move to Uruguay or Tennessee.  What I do care about is that you come to understand an honest and realistic assessment of where you are financially today, and where you are likely to be when you retire, assuming you’re not already partially there.
  2. Understand that you cannot retire with a mortgage payment that depends on your working income… no chance, no way.  It won’t work… and as the years pass, it’s increasingly like playing the home edition of Russian Roulette.  In the end, you either lose your home, are forced to sell it, or the payments drain your nest egg, virtually ensuring that you’ll run out of money before reaching your life expectancy.
  3. The plan of working until you drop dead is just a fantasy you tell yourself to feel better, but it’s not how life works very often, so it’s hardly an outcome on which you can depend.
  4. Our economy doesn’t have a cold or even the flu… it’s down for the count, and not getting up, if by getting up you mean returning to how it was prior to 2007.  But that doesn’t mean we’re doomed… this is still the land of opportunity, but now you might have to look for that opportunity in places you never considered looking before.
  5. Coming to understand these precepts sooner instead of later can have a huge positive impact on your retirement, because the sooner you can reduce your cost of living, the less money you’ll need to retire and the more money you can sock away for your future.


I hope this has helped you understand things better, and if not… at least I feel certain that because of me, you’ve learned more about Uruguay than you ever thought you would.

I also hope you will contact me for more information about the HECM for Purchase program, in the event that you decide to downsize or right-size in order to reduce your cost of living whether prior to or once retired.

I know very few people ever mention the program… perhaps because they don’t know about it, or maybe because they’d rather make money on your conventional loan, even though originating a tradition mortgage to a 65-70 year old is a very risky proposition.

The point is that there are something like 10,000 baby boomers turning 65 each day in this country, and very few are even moderately prepared for the decades of retirement that lie ahead… while at the same time there are approximately 3,400 homeowners being served with foreclosure notices each day, and half that number being evicted.

I used to think I could be a part of the forces to change that situation for the better, but I don’t think that anymore.  Today, I am only focused on what I can accomplish, and that’s help you make the best out of a terrible and tragic situation.


Mandelman out.

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