Retirement - controlling our future lives

I'm not sure about other countries but in Australia now, if you're in paid work, you'll pay into a compulsory superannuation/retirement scheme. Your employer will pay nine percent into your superannuation account and over the course of your lifetime, it is estimated that money will be enough to see you through your old age when no government pensions are paid. That superannuation is put into managed investments that are usually reliant on healthy real estate, insurance and financial markets to slowly build funds. My late friend Bernadette lived on her superannuation but when the global economic crisis (GEC) hit, she lost a lot of money.

Cutting up a retired bed sheet for cleaning rags. We'll use the elastic from the fitted sheet as tomato ties.

Although Australia has gone through the GEC better than most countries there is still a lot of pain here, jobs and homes have been lost and businesses have closed down. Unfortunately, we are not out of the GEC woods yet. Just this morning I saw on the news that the American housing market crashed in last month to the lowest on record. And that is not the worst of the American problems, the current American debt is $13 trillion! This is from moneycnn.com: When anyone talks about U.S. debt, they typically refer to two numbers. The first is the debt held by the public. That's money owed to those who have bought U.S. Treasurys, most notably big bond mutual funds and foreign governments. Debt held by the public today is roughly $8 trillion and rising.
The second number is the money the federal government owes to government trust funds, such as those for Medicare and Social Security. The government has used revenue collected for those programs to cover other outlays. Currently, the debt to the trust funds is approaching $5 trillion.

I doubt I'll be the only person very worried by that second paragraph, but it's no good thanking your lucky stars you don't live in America because if America crashes, we all crash.

I remember the 1970s quite well and although it's only 30 years ago, that 1970s world is a completely different place to what we have now. Look 30 years into the future, you may be preparing to stop work, but what amount of money should you have? What will you need to support you through the rest of your life? How can you prepare now for a world you have no idea about? Is paying into a government backed investment fund the best idea? I don't know the answer to those questions, and I doubt anyone would, but I believe the answer, no matter what the retirement question, is to pay off debt and live simply. BTW, I do agree with a couple of commentators yesterday who advised not to invest extra money in retirement funds. Whatever investments you make that are not compulsory, should be in your control - buying land seems to be a good investment to me.

This is my knitting (and napping) chair. It's usually like this - surrounded by knitting, yarn and patterns.

The key to living on less is to change to a more frugal mindset. If you can't do that, you'll be miserable because you'll be wishing you could buy THE shoes or THE iPod that will make you "happy". You have to know, deep down to your bones, that being frugal and having less than you did before, does not make you miserable or cheap, it's the open road to a sustainable future. It will get you off the consumer merry go round, where working to buy "stuff", holidays and everything new will keep you strapped to the grindstone to pay for extras, on top of paying to live. Changing your expectations is crucial. Forget about having the "best" house in the street, aim instead for the most productive house.

I hope every single one of you will be able to retire when you feel like it and live as Hanno and I do. I loved working, I always had good jobs and I think I gave value for money, but as you age, you change and you want to give value to yourself rather than to your employer, no matter how much they pay you or how good your job is. You'll probably find, like I did, that you'll still be incredibly ambitious at 50 but by the time you're 55, you'll be questioning your role at work and wanting to slow down. By 60, I just wanted to be me, here now, with no paid deadlines to meet, and with hours to spend as I wished. I wanted to smell the roses before it was too late and I wanted to draw my family close, and even though they'd grown up and left home to make their own lives, I wanted them to know I was here, whenever they needed me, to support them. Now don't get me wrong, I still wanted to work, but I wanted the work that I did to mean something and to be primarily in my home for the benefit of my family. Most of us will work all our lives, but hopefully, part of that work will be for yourself, making a life that is slow, comfortable and meaningful.

Recently Deborah, a reader, kindly sent a large ball of Bendigo pure wool in a beautiful maize colour. Our new baby will be wearing this next year.

Apparently the amount recommended for a retired Australian couple of live on now is around $50,000 a year. Hanno and I live on half of that and we could further reduce that if we needed to. I firmly believe that work is an important part of life. It helps shape us, it can give us a sense of self confidence and pride and it keeps us active and alert. But work doesn't have to be paid work. Work can also be the daily activities that, when combined, produce the makings of a simple and less dependent existence. Let me say this loud and clear, we can cut out the middle man, buy only the raw ingredients, the needs of life and not the wants, and we can produce as much as we can at home. This cuts the cost of living to something that is manageable and gives you healthier products that don't need preservatives so they can sit on a shelf till sold.

There is no doubt that the most important things we need to do in our quest for an independent and sustainable old age is to buy a home, pay it off as quickly as possible, and to control our spending. If you can reach your ideal retirement age, whatever that is, with no mortgage or any other debt, you'll be in the driver's seat. If you've paid into a superannuation/retirement fund while you worked, if you've put extra money into additional investments such as land, if you've developed a frugal mindset, if you've skilled yourself in how to live simply you should be able to sail gently into your later life with few worries. But the key to all this, is NO debt, being skilled enough to look after yourself and to produce as much as you can at home.

Hanno planted tomatoes outside the garden this year. This photo was taken about 10 days ago, the bushes are full of flowers now.

We are all caught up in this grey tsunami. The time has come to step up and own our lives. We need to define what it is we intend to do, accurately assess how much debt we have, work out a plan to pay it off quickly, think about what skills we need to develop and then step off confidently in that direction. We are all in this together. We need each other to learn from and for support. We may not have an over the back fence relationship but we are all easily contactable via our computers and that, my friends, may be the making of us. WE hold the knowledge, the desire and the power to change. Let's put on our aprons and do it.