Our father used to preach the value of having only one of everything, rather than multiple, redundant masses of stuff. It’s good advice that we should have followed.  Dad liked to have one pocket knife, one set of golf clubs, one good snow shovel, and so on. And everything had its place, and was replaced only if it broke.  His was what the Radical Fire blog would call a “minimalist” lifestyle.

Radical Fire’s Marjolein describes such a lifestyle as having “less clutter, less maintenance costs, less things to worry about… less, less, less!”  Marjolein writes that over the years, she accumulated a lot of things that “don’t bring me joy or happiness.” While her place was neat and tidy, her closets were packed to overflowing with “stuff.”

People tend to keep stuff in case they may need it again, but Marjolein says getting rid of unneeded and unused possessions is very liberating. You will, she writes, “spend less time on maintenance and cleaning,” and less searching through closets packed with stuff you don’t need for things you do.

Another advantage – you’ll have more money. You can sell off surplus stuff, and you will spend less on new stuff once you adopt a minimalist gameplan, she writes.   Before buying anything new, she now asks herself “do I really need this, will it bring me joy, can I afford it, and do I really want to spend my money on this?”

Other tips include shopping with a list and starting “small” on your voyage towards minimalism.

Writing in Canadian Living, Paula McKee quotes Joshua Becker (founder of the Becoming Minimalist website) as saying, of minimalism, that “while it is true that you will have less, it’s less of what you don’t need, and more of what you want, like time and money.”

Becker tells Canadian Living that “material belongings become more of a burden than a blessing” over time. He agrees with the idea of starting small on minimalism, noting that a little of it “is better than none at all.”  His approach is to look at all your stuff, and group it by “trash, give away, keep and relocate.” You can give unwanted goods to a charity, have a garage sale, drop things off at a consignment store, or sell things off online, the article suggests.

The rewards will be a home that is “easier to clean and keep organized,” more time to spend doing what you want, and more money to do it with, the article concludes.

Writing for the Next Avenue blog, Michelle Black takes a look at how minimalism impacts retirement.

Her story looks at the lifestyles of Amy and Tim Rutherford of Colorado, among others. They first sold off their big home and bought one that was one-third the size. As part of that process – less space – they chose to get rid of excess stuff, “donating carloads of items to Goodwill” and selling things online for “pennies on the dollar.”

They felt more at peace in their new, uncluttered home, the article notes. “To us, physical clutter equalled mental clutter,” Amy Rutherford tells Next Avenue. On the spending side, she estimates that where they once spent $115,000 a year maintaining the big house and its clutter, they now are spending a “third of that — $36,000,” Next Avenue reports. And that includes a whopping 100 days of annual travel, the blog stresses.

Let’s unpack all this. Imagine a sort of “one of everything” existence where everything has its place, and you can always find it. Then imagine continuing to live like this after you have done a purge of all redundant “stuff.” Envision closets that are not stuffed, storage lockers that are no longer necessary, and the pleasure of simpler housecleaning and more cash in your wallet. There’s a Zen feel to it all.

And if, during the purging of your unloved extra stuff, you happen to pocket a few bucks – or trim your monthly budget by downsizing – you can “declutter” some of that extra cash by saving it for retirement. After all, your future clutterless you will still need money for travel and other tidy fun. A great home for those extra dollars is the Saskatchewan Pension Plan, where expert investing will grow them into future retirement income. They’ve been doing it for 35 years – why not check them out today?

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U.S. study finds retirees overestimate retirement income, undersave

A study by the University of Southern California, reported on by Next Avenue, has revealed some interesting findings.

It seems, according to the magazine, that retirees “were too optimistic about their retirement benefits, which led to them not saving enough during their working years.” In fact, the magazine notes, “if they could go back in time, they’d have postponed retiring, paid off debts before leaving the workforce and learned more about their personal finances.”

The study is called Subjective Expectations: Social Security Benefits and the Optimal Path to Retirement. And while the contents are aimed at a U.S. audience where retirement rules and programs are different, there is still some good information for us Canucks.

The study found that men were less optimistic about their future retirement benefits than women, which caused them to save more. Those with lower education levels also tended to believe they didn’t need to save, the article notes.

“Being mistaken in this way is costly for these groups because it makes it more difficult for them to realize they need to prepare to be appropriately ready for retirement,” states USC’s Maria Prados in the article. “Given the complexity of how benefits are determined, it is not surprising to see an educational and socioeconomic gradient in these misperceptions,” she states.

When the research looked at attitudes towards Social Security (it’s somewhat equivalent to our Canada Pension Plan and Old Age Security system), it found that 20 per cent of those surveyed regretted taking their benefits early, and 21 per cent found that the benefits they did get “were substantially different than what they expected; most expected more.”

A surprising 50 per cent said they don’t have a good estimate of what their future retirement benefits will be.

The article makes several key recommendations so that you don’t find yourself short in your Golden Years.

• Expect to live a long life: A big issue, the article notes, is “forgetting you may live to be 98.” And if you do, you’ll find that taxes, healthcare costs and caregiving expenses will all be much more, due to inflation.
• Get an estimate: If you are eligible for government retirement benefits, or benefits from work (or both), be sure to get estimates of what you’ll get before you get too far along in planning. Try to get estimates that show after-tax amounts.
• You can get more if you retire later: While the article focuses on U.S. programs, be aware that CPP is reduced if you take it before age 65, but is increased if you take it after 65; the latest you can start it is age 70.
• Create a lifestyle budget: Be aware of what you plan to spend in retirement – just as you need to understand your income, you need to also understand your future spending.
• Women should take a more active role in financial planning: There are many resources available online to get you up to speed on your retirement benefits from work and the government.

The article concludes with this good advice – “plan for more income than you think you’ll need.” It’s very true that the cost of living very rarely decreases.

If you’re a member of the Saskatchewan Pension Plan, you can estimate what your future retirement income will be using their Wealth Calculator. As well, you can see how your savings are doing online using MySPP. Be sure to check out these key tools soon, particularly if retirement is fast approaching!

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