Fun With Ken and Barbie

Fun With Ken and Barbie by Bill Roberts

As Baby Boomers approach retirement they need to do a little planning.

The most important plan is the CASH NEEDED plan. This is a complete assessment of how much money you will need each month to maintain your lifestyle.

We are going to use a fictional couple, Ken and Barbie (at least I think they are fictional) as an example. They moved into a new, smaller home in a Planned Unit Development (PUD) three years ago in anticipation of their retirement. They only put 20% down on the house and financed the balance for thirty years. They could have paid cash and owned their home "free and clear" but they didn't feel that that was smart money management. We'll talk more about this later.

The PUD was perfect for them. They got a brand new two bedroom, two bath house on a small lot. Not too much house and not too much yard. The development also has a pool, tennis courts, and a clubhouse. They can use it for their own use,  meet their neighbors there, and entertain guests. The Grandchildren love the pool.

It is a high security park with a gate guard and 24 hour roving patrols.

OK. Back to the CASH NEEDED plan. This is a complete MONTHLY budget for Ken and Barbie expressed in today's dollars. We will adjust it for inflation later.

I bet you didn't realize just how much you have to spend on housing every month. These expenses don't go away just because you retire.

The next part of our analysis is transportation.

If you are going to travel after you retire (that's why you want to retire in the first place, isn't it?) don't forget the cost of getting there. Ken and Barbie plan on taking two two-week "vacations" each year.

Now, we still need to account for the BASICS of Living.

And then you shouldn't forget holidays and birthdays.

And if we have forgotten something we need to allow for it here.

Wow! The monthly total is $8957.00 per month. That's a whole lot more than the $2500.00 social security they expect to collect.

I bet you didn't think retirement was going to be so expensive. Don't worry we'll figure it out in part two. Stay tuned.

Fun With Ken and Barbie, Part 2

If you would like to discuss your retirement planning give me a call. Bill Roberts (619) 244-4610.