By Lauren Wanko
Bob and Pat Schnur retired a few years ago to babysit their grandchildren. The couple’s been planning for this since their 20s.
“We saved every week, whether it was a small amount and as our incomes grew we saved a bigger amount but we saved, saved, saved,” Pat said.
And now the Schnurs are grateful they did because the couple’s enjoying their retirement years in a state they say is expensive to retire in.
“Property taxes are really high in New Jersey,” Pat said.
“But we love New Jersey. We don’t want to move out of it. We’ll just bite the bullet and pay the bills,” Bob said.
“The difference between New Jersey and retiring in other states is that we’ve got the high cost of property taxes, we have an underfunded pension that we’re worried about, we’ve got the cost of fuel, tolls. Most of those things are outside of our control,” said Tom Duffy, owner of Jersey Shore Financial Advisors.
Which is why New Jerseyans need to keep track of the things they can control, like their expenses insists Duffy. He says it’s hard to pinpoint the exact amount of money residents will need every year in retirement.
“The main thing is what I work with clients on is figuring what is your cost of living today because that’s gonna be your cost of living tomorrow, adjusted for inflation, and the year after the year,” Duffy said.
It starts with understanding your cash flow. How much is spent on everything from groceries, utilities, property taxes, travel.
“Because all of those expenses, they don’t cancel them. When we retire, the only thing that goes away really is your commutation costs, but if you’re driving to play golf three times a week you might drive farther to play golf then you’d go work,” Duffy said. “Let’s face it if you’re gonna retire 10, 15, 20 years from now, your cost of living could almost double in 20 years just on basic inflation.”
Calculating the cost of supplemental health insurance is important, says Duffy, who recommends long-term care insurance too — something people should consider buying in their 50s.
“The cost of that stuff is skyrocketing. We have 10,000 people turning 65 every day. Those people, some of those people are gonna need care,” said Duffy.
Oftentimes Social Security benefits and pensions don’t cover all the monthly expenses.
“A little bit of arithmetic. Add up how much you’re gonna get every month from Social Security and how much you’re gonna get every month from your petition. Will that pay your bills? Chances are that will cover about two-thirds,” Duffy said.
Duffy says in order to live comfortably in retirement, it all starts with living within your means before you retire. And start saving as early as possible. At least 10 percent of your yearly income should go toward a Roth IRA or your company’s 401K plan.
Although Bob has a pension, he’s always contributed to his company’s 401K.
When asked why it important for him to do that, Bob said, “Looking to the future. I watched my Pop, knew what it was like to retire and make sure we have enough money to live comfortable.”
The Schnurs are still saving money.
“I’m saving until I can’t save any more,” Pat said.
Not only for their future, but to spoil grandkids too.