What is your "Plan B"?

Let me start by telling you that this blog is written specifically for people who are approaching, planning for, or already in retirement. My purpose is to urge you to develop a "Plan B".

For most, your “Golden Years” are not looking so golden. Your 401K is greatly diminished, your home value is ½ what it was and you may well be underwater on your mortgage. You may be out of work and if you are over 60 you are basically unemployable. Even if you are employed, your company's retirement plans may be underfunded and at risk.

Health insurance is being overhauled on the backs of seniors; Social Security has already announced there will be no 2010 COLA so you just took the first pay cut. If Congress has its way, Medicare will soon take huge hit, your second pay cut.

You need a Plan B focused on: 1) staying healthy and 2) creating an income stream that is independent of your investments, your company retirement, and Social Security.

Back in 1968 Eldridge Cleaver said, “If you are not part of the solution, you are part of the problem”. What I am proposing is that you must “Be The Solution”. No one is going to bail you out. You can’t count on the Government or your company; your house value is not about to bounce back and as for your investments, well, who knows. If things work out, that's great, but what if they don’t? What is your “Plan B”?

Let me tell you my story. I will turn65 in January. I had a great career; I made good money as an international business consultant and I traveled extensively. In 2004 I was at the top of my game. I had a contract in Paris (2 weeks a month) and a long term deal in Tokyo. My wife of 25 years and I had just bought a new 4,500 sf home on ½ acre in Northern VA. All but the last of our children had made their way through school and were out living their own lives. We were not rich but we had a good life and a nice nest egg, a large portion of which was “secure” in the equity of our home. We were well positioned for retirement in five or so years.

One day in August of 04, my wife came home complaining of stomach pain; 3 hours later she couldn’t get out of bed, 8 months later she was dead. The cancer’s appearance was sudden, it was brutal, and it overwhelmed our lives in so many ways. You can read My Story if you want to know more.

Health insurance took care of all but about $75,000 of her medical costs; my financial meltdown began when I had to stop working to take care of her and our then 15-year old daughter. Stopping work meant no income. Three months after my wife passed, I was diagnosed with prostate cancer. Fortunately it was early stage and through surgery it was removed and I recovered completely.

As a single parent my ability to travel was severely limited; it was impossible to rebuild my former career. I was then over 60 and with the economy starting to slow there were few opportunities for employment. When the economy started to tumble, I was able to liquidate some investments, but there was little I could do as my home equity disappeared.

Losses from my wife's illness, my career change and investments were devastating. I had no Plan B; I had to start from scratch. "Welcome to Wal-Mart" was starting to sound ok.

This blog will focus on how I developed my Plan B, what I learned, alternatives I considered and some of the mistakes I made. Through it all, my goal is simple; I want you to construct your own Plan B. I will offer suggestions, talk about alternatives and even act as a coach should you want.

Total Blog Directory
Retirement Blog Directory