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A Retirement Lane Roundup

This week we start with a post by Roshawn Watson, My Big, Fat Trashy Home: The Fall of the McMansion. In this article, Shawn does a great job explaining the origins of these homes and how they cost you far after the purchase is over. The article hit home for me as we quickly discovered that we weren’t really using all the space in our house (just over 3000 sq feet) after we moved in. Do we really need a formal dining room, and what’s with that living room, when the family room is where we hang out? On the flip side we had a neighbor move away from a similar size home to one twice the size. Really. Me, I’m looking forward to the downsize, a nice 2400 sq feet.

JLP at All Financial Matters asked, Should We “Means Test” Social Security? This really is a tough question. Is social security meant to be insurance against poverty or a defined benefit retirement plan? He links to a video that states for 55% of retirees, social security is their main source of income. Remember, social security is already a progressive tax, the higher earners paying more for a lesser benefit. (A $60K earner will not see twice the benefit a $30K earner will upon retiring. )  The system is broken, and no, I don’t have any better idea for a fix.

Money Fund discussed the 6 Steps to a Satisfied Retirement. The post summarizes a consumer reports survey of 24,000 retirees, so it’s a distillation of quite a bit of experience and a good read.

My fellow Money Maven, Neal Frankle posted 401k Performance – 5 Tips To Turbo Charge It Now. With fewer companies offering a traditional defined benefit plan, and no one really sure if social security will be there when we need it, the 401(k) is now the primary retirement account most of us look forward to.

Next, Mike at The Oblivious Investor explains TIPS vs. Nominal Treasury Bonds. I don’t know when inflation is coming back, but it’s likely to return at some point given the trillions the government has basically printed and will need to over the next year. TIPS can help protect the value of your savings, keeping up with inflation.

Until next week.

Joe

  • Money Funk August 29, 2010, 2:08 pm

    Well thank you much for the mention! (aka – funk). Being financially ready for retirement scares me, but I know a well laid out plan with a plan B and some financial discipline will set me in the right direction!

  • Roshawn @ Watson Inc August 29, 2010, 2:27 pm

    Joe, I saw a friend today whose home is about 11,000 sq feet. It is absolutely gorgeous. However, I couldn’t help but think about our discussion about home size yesterday. I had to wonder, even with a large family, what is truly behind this home size? Does its utilization justify the size to my friend? I know it’s really none of my business nor do I really care. Fortunately for my friend, the home home is paid off. Anyway, thanks so much for doing this round up and for including my post 🙂

  • JOE August 29, 2010, 3:43 pm

    You may not care, but it’s still a curiosity. I can tell you that I like our three bedrooms, we have one daughter, and the guest room is great for company, hers or ours. Some of our size is from a nice sized bedroom and master bath. I once said without thinking “Jane and I were kicking her soccer ball around in our bathroom” to a coworker and got the strangest look. Our kitchen is fine, the family room not huge. There’s a first floor room that I use as an office but it could be turned into a bedroom if need be. I’d imagine one can have a huge kitchen/family room if they entertained frequently. How you get to 11,000 is beyond me.

  • Money Funk August 30, 2010, 10:52 pm

    We live in a 1177sq ft 3-bed, 2 bath house. It works great for us. Less cleaning. I would love to have another bedroom for an office/hang out room. But its all good. And I cannot complain about the mortgage payment (less than most people’s apartment rental)

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