We're all still reeling over the awesome collapse of economies throughout the world, and recovery is still a long way off. We haven't seen anything like it since Black Monday, 1929, and the Great Depression that followed. If the hoped for recovery takes as long as it did after that nightmarish day, we're looking at approximately 25 years until we're back on our feet. Hope and faith are at an all time low, with little wonder considering all the lose and suffering that is ubiquitous. Most of us are doing all we can to keep what we've already earned, while the rest of us are sinking into lower economic classes. With such a bleak outlook, few are contemplating a retirement strategy; many have resigned themselves to having to work until their death. For those who have miraculously managed to retain their wealth and stay afloat, retirement may still be a hope. If you're among those fortunate ones, if retirement is not yet an impossibility, you may still have to amend your retirement strategy to make it happen. If, after taking all the good advice you can find, you still find retirement dubious, you might have to take that one step we all hesitate to take: you may have to relinquish your economic class.
Voluntarily stepping down several degrees from your current lifestyle may seem draconian, especially when you are still in a position to finance it. It's not like deciding to change your investment strategy to a more cautious one, investing more heavily in bonds than stocks, or shifting all your investments to fixed-income investments. Those are relatively painless actions. Even selling off your investments at a loss doesn't compare to stepping down. You'll experience pain to sell at a loss, but at least its a one-time thing. Putting your money into CDs, IRAs, and 401K plans will ease the pain. Stepping down from your economic class, however, will hurt day after day, to the day you finally realize the benefit.
Stepping down means such things as selling your expensive house for a cheaper one, perhaps having to live in a neighborhood less secure than your gated community. It may mean living without a swimming pool, without the five acres and the pond. For some, it may mean living in a condominium rather than a two-story house. This retirement strategy technique will require you to give up that expensive car that you dreamed of since you were a kid and, instead, driving one of those compact economy cars that look like a box. Stepping down may mean giving up your weekly treats to that classy restaurant and taking the family to a fast food place instead. It may mean buying your clothes at WalMart instead of Macy's, changing your diet from steaks to tuna, attending little league games instead of major league playoffs. It may mean limiting those cell phone calls, even settling for dial-up ISPs instead of satellite. It may mean sending the children to a public school instead of that fine private one. Stepping down as a retirement strategy technique means frugal and humble living, and all this when you still have the income to afford the more expensive life.
Stepping down will mean saving for the day when your age will make you unemployable, when the aches and pains of an older body will prevent you from working a full-time job. It will also mean saving you from the humiliation of homelessness, hunger, raggedness, and hopelessness. As a retirement strategy technique, stepping down may make the difference between living a long and comfortable life or a long and miserable one.