Five Ways to Prep for Retirement that Don't Include a Bank Account

 I read an article this morning about a potential bank “bail-in.” The gist is that if the economy starts to really take a tumble and one of the big four banks (JP Morgan, Citigroup, Bank of America, and Wells Fargo) goes down, the likelihood that the government will start drawing money out of personal, individual accounts is … well, likely. Again according to the article, FDIC bankers talked openly about a bail-in as a strategic option. As the article points out, it's happened, or almost happened, elsewhere (Greece, Portugal, and Cyprus), and it could happen here. Anything can happen, right?

Chances are pretty good that the banks won't take all of the money we've entrusted in their care, but they could take a portion of it, to which they are not entitled, via a government tax.

I have been a stay-at-home mom with a part-time income for over two decades. As such, I haven't had an employer-based retirement fund, nor have I started my own retirement fund. Frankly, until recently, I always thought I still had time. Then, my youngest child reached adulthood, and suddenly, I am keenly aware that I am not getting any younger. Oops!

Last year sometime, I started looking at my options for a retirement fund. At my age, there is not much of a chance that I will be able to save enough money to keep me anywhere close to my current level of spending, which means I can either keep working until I die, or I can find ways to not need so much money.

At that time, Deus Ex Machina and I set up a spreadsheet so that we could look at some numbers. If we invested 6% of my income in an IRA at current interest rates, I would have about a year's worth of salary saved when I reached retirement age. I might be to pay cash for a used car … or if costs keep going they way they are, a dozen eggs.

If I waited another ten years to start withdrawing the money, and I only took out enough each month to cover my (current) property tax, it would only last 8 years after I started withdrawing money. Looking at those numbers is incredibly depressing. Money sure doesn't grow as fast as it spends.

Like me there is a disturbing number of individuals who don't have any personal savings. Almost one-fifth of our senior population depends solely on the federal social security system for financial support. It's usually not enough, and many seniors, these days, are taking low-wage jobs just to make ends meet.

Experts are full of great advice on how and how much we should be saving toward retirement. According to the second article, if one earns an annual salary of $74,000, one would need to have saved $1.3 million for retirement, which works out to over $900/month or $11,000 per year in savings, starting very young. At my age, $900/month wouldn't be anywhere near a million dollars. For us, putting that kind of money into a savings account and still keeping a roof over our heads and food in our mouths has just never been possible.

Experts advise us to start saving for retirement earlier rather than later.

Yeah … well, that ship sailed without us.

The fact is that it becomes even more difficult to START saving the older one gets, and when one is my age, if one doesn't already have some savings, whatever one is able to save from this point forward isn't going to go very far anyway. Sometimes any little bit doesn't really help. What's that saying, rob Peter to pay Paul? That's how starting to save at my age can feel.

Instead of putting $900 a month into an account, where the money may not be secure, I could, right now, be investing in my future in very real ways that will make my future more secure and more comfortable.

Here are five ways Preppers (or anyone) could be investing that don't involve putting our hard-earned dollars into a savings account.

1. Pay off mortgage

In her provocative tome, Possum Living, Dolly Freed describes the low-income lifestyle she and her father enjoyed when she was a teenager, which they called “possum living.” In 1975, the poverty threshold for a non-farm family of four was $5,500. Dolly and her father lived on a paltry $700 per year. I read her book. It doesn't sound like they were suffering. At very least the up-beat tone of the book belies any notion that their lack of income was detrimental to their physical or psychological health. In fact, Dolly and her father were both, if the book is to be believed, physically fit and very happy.

In the first chapter, Dolly admits that the only reason she and her father were able to cultivate and maintain their lifestyle was that they owned their home. They didn't rent, and they didn't have a mortgage.

Based on that book, alone, the best thing one can do, if hoping to live well in retirement, is to make sure that one has a cost-free place to live.

Numerous articles discuss the issues with senior poverty. Social security is less than what a person can make working a full-time minimum wage job. If that's true, a senior citizen who only has social security will be subsisting on about $1200 per month. If one has to pay rent or a mortgage out of that amount of money, it might not actually be possible to subsist on only that. As such, paying off the house and living rent/mortgage free would be a huge step in the right direction.

I may have to still pay property taxes, but at the moment, the property tax on my house is one-fifth of my mortgage payment. Renting a comparable property would cost fifteen times what my property tax is. Renting a one-bedroom condo (with no yard) would be six times the cost of my property tax.

In short, I am much better off owning my home, and the extra bonus is that if I find myself short of cash, I have enough house that I could get a roommate to help defray the costs.

I could invest in a retirement savings, or I could pay off my house. The latter is, in my opinion, a much better choice.

The best thing I can do for Old Wendy is to make sure that she has a place to live that doesn't cost her an arm and a leg.

2. Reduce the cost of utilities/invest in an alt energy system

Going hand-in-hand with paying off the mortgage is reducing/eliminating one's other bills.

Here at Chez Brown, we are already doing without cable television. The fact is that the library has all of the video entertainment I could possibly want, including a streaming service, and it's FREE!

We have worked for years to reduce out electricity usage, and at one point, had our bill down to around $50/month, half of which was the “delivery fee” for CMP to maintain the lines that brought electricity to our house. Unfortunately, over the past three or so years, our usage and cost per watt has increased quite a lot, and we're looking at alternatives.

What we have to ask ourselves is, what do we really need electricity for? As I'm writing this, the electricity is out due to a huge windstorm. I have a laptop, that's running on battery power right now, and when I get ready to upload this article to the internet, I will use my cellphone hot spot. The amount of electricity I need to power my lap top and my phone could be easily generated by a single solar panel. Our (hopefully very near future) alternative energy equipment will be sized according to what we absolutely need, appliance-wise.

We can also control how much water we use, and while the water company has been increasing our rates for a lot of years, there are things we can do. In the spring (after the thaw), summer, and fall, we can use our rain barrels for watering the gardens and the animals. And there are dozens of ways to use less water, like taking faster showers and turning off the faucet.

Reducing our overall footprint with regard to electricity usage and water usage will be valuable to Old Wendy. The less one has to pay for those basic things, the less money one needs to live comfortably.

So, instead of spending $100/month on a retirement account, one could put those funds toward setting up an alternative energy system, and then, live without paying an electric bill for the rest of one's natural life. It would take half as much time to save up the cash to pay for an alternative energy system as it would to save enough to pay off my taxes for eight years after I retire.

3. Learn to grow food/forage

One of the biggest problems that I hear for the elderly is having enough food, and that's especially true

with today's sky-rocketing food prices. I read an article in which the author recommended that the elderly utilize food pantries. I don't disagree, exactly. The service the food pantries provide is invaluable to a lot of people. The problem is that relying on a food pantry for all of one's dietary needs is foolhardy. Food pantries aren't designed to be an alternative to the grocery store. The function of a food pantry is to provide a supplemental food source for low-income individuals AND to keep edible food out of the garbage. It isn't meant to be a substitute for grocery shopping or other sources of food acquisition.

What can be a much better supplemental food source, though, is a garden. There is a misconception that one needs a large piece of land, and that simply is not true. In fact, there are plenty of examples of people growing food in very small spaces.

Having a garden is a hedge against bad times, and I'm finally figuring a few things out. Potatoes grow really well in bags. Actual seed potatoes are much better than trying to reuse those grocery store potatoes that grow long and spindly in the cabinets. Diatomaceous Earth is awesome. I never plant enough garlic. Raised beds, straw bale gardens and container gardening are the best methods for my small space, and I should stop trying all of the other techniques I've tried and failed at.

Which actually works to my point. Those methods of growing are easier and yield more for me, but they are also easier for older people. Raised beds and straw bale gardens don't require all of the bending, stooping, and tending that a traditional garden with rows requires.

But also, having a garden is a very cheap way to supplement one's food supply. When I was volunteering at the pantry, we had a couple of elderly clients who also had a plot at our local community garden. We didn't see those patrons for most of the summer, because they were able to grow what they needed to supplement their diets. With a slightly bigger plot and the ability to preserve some of their harvest, those patrons might not have needed to use the pantry at all.

One 4'x4' garden bed can feed one adult two vegetables per day for the growing season. That's the statistic I've heard over and over again. I have much more space than just two 4'x4' garden beds, which means that, depending on the crops I choose, I could grow enough vegetables to feed Deus Ex Machina and myself for three-quarters of the year. If we keep raising chickens and rabbits and it's just the two of us, I could raise enough protein (between meat and eggs) for the whole year. If we forage the wild apples and berries we find and add them to the grapes, apples, blueberries, and raspberries we have growing on our property, we have plenty of fruit. If we include maple syrup, we have completely rounded out our diet and the only thing we aren't raising is dairy and grains.

The only reason we aren't more food self-sufficient right now is that there isn't enough time to properly grow and tend the garden, because we work, but since we already have the infrastructure in place and the knowledge, when we do retire and have more time to spend in the garden, we could be supplying nearly everything we need to have a calorie-rich, healthy, organic diet.

4. Cultivate self-sufficiency skills

Deus Ex Machina is fond of saying one either has time or money, but rarely both. Money allows us to pay someone else to do the things we would/could do for ourselves, if we had the time. In retirement, the one thing most people have is time, but it's best to begin learning those skills before they become a necessity.

Skills like: cooking from scratch, canning/preserving, butchering animals, darning socks, mending/making clothes, changing a bicycle tire (and riding a bicycle, if that's not something one learned as a child), sharpening a knife, cutting one's hair, cooking without electricity or gas, building a fire, turning tree sap into syrup, making soap, tincturing herbs for medicine, fermenting vegetables (for preservation and healthier food), making cheese and yogurt from milk (to prevent spoilage and waste), and doing small home repairs (like painting the house, changing filters, repairing a faucet, patching a

hole in the wall).

None of the above skills require great physical strength or are particularly difficult to do, but knowing how to do them, and more importantly, doing them, could save a great deal of money.

For instance, we all know that cooking at home costs far less than eating out, but cooking from whole ingredients rather than buying the prepared foods from the freezer section, also saves a ton of money. If it's just the two of us, and I still cook like I do now, one day of cooking will give us three or four meals. The leftovers can be packaged and put into the freezer or, depending on the food, put into jars and pressure canned for meals at some much later date. Get stocked up enough, and we wouldn't even have to go to the grocery store, except for the odd item here or there. Retailers count on consumers spending more than they intended at the store. It's built into the store design for everything from the lighting, music, and temperature, to the way the food is displayed. They want you to impulsively purchase that package of cookies or potato chips. Not going to the store saves money just from eliminating impulse buys. I've already discovered that from using online grocery services like Misfits and Boxed.com.

5. Stay Physically Fit

A few years ago I was having a conversation with a friend. I said, “If my house is paid for and I don't have any debt, and I am growing my own food and making my own electricity, what do I need money for?” She said, without hesitation, medical expenses.

As someone who hasn't had very many medical issues, I wouldn't have thought of that one, but the general notion in our culture seems to be that age is equal to poor health. In fact, an estimated 75% of people in my age bracket are taking prescription medications. I guess I'm in the minority among half-centenarians. But I approach health differently, I guess.

A while ago, I went to the doctor for my annual physical, which included a blood test, nothing in the results worried him, except my iron levels. He recommended a stool test, and I asked him why. Low iron, he said, might indicate internal bleeding. I scoffed. I have had low iron/anemia since … well, since I can remember. It's not new. If it's caused by bleeding, then, I've been suffering from internal hemorrhaging my whole life. Seems like there would have been other symptoms, if that were the case. I declined the stool test.

The two things that did worry me, at that time, but didn't phase my doctor were my blood sugar levels, which looked high to me, and my weight, which was a bit more than I had thought. I was surprised by how much I had gained. I knew that I was getting heavier, but since I don't own a scale, I pretended not to notice that my pants were a bit snugger than they had been and that my aching knees were my age catching up with me.

When I got those results, the first thing I did was to reduce the amount of sugar I ate. I didn't cut back on food. I didn't count calories or go on a diet. I just, simply, reduced the amount sugar. No soft drinks (we bought a soda stream for seltzer water). No sweetened tea. No iced coffee with a sugar sludge at the bottom.

The second thing I did was to start getting more exercise. It started with walking in the mornings. Just around the neighborhood with Deus Ex Machina and our dogs. Then, Deus Ex Machina and I started doing 10 minutes of Yoga five days a week. In nice weather, we have a number of regular activities: walking (with the dogs, but our old pupper can only handle about two miles); biking; kayaking; and hiking. Deus Ex Machina likes mountains that are at least 1000 ft of elevation gain. He likes to go higher. I like less elevation gain, but a longer trail. I like to walk. We also take dance classes and Qi Gong. When we added these activities to our lifestyle, I lost 10 lbs and two pants sizes.

None of the above is medical advice. It is simply what I did when I was confronted with medical issues. I could have done nothing, continued to gain weight, continued to enjoy sugary drinks and snacks, tested positive for diabetes and been prescribed a diabetes medication. Maybe none of my changes will stop me from developing diabetes, but if it does, I've saved future Wendy thousands of dollars in medication expenses. Not spending my social security money on medication is cash in my pocket, and not needing medications, means that I can survive on less cash.

All of the above ways of preparing for retirement are cumulative, like interest ... only better.  Once .one starts doing them, the savings start to pile up, both the savings in actual dollars, but also the savings in stress and worry from not having an adequate bank account.