Many, maybe most people, expect to live on less, to downsize, when they retire.  Some plan for it, some just let it happen. Those who plan come up with some interesting ideas.  Example:

A long-time friend at the GSA decided that when he retired he was moving to Washington state. To a small town right across the Columbia River from Portland, Oregon. He had no ties to the West Coast, no relatives, no interest in hiking, hunting or fishing.  The primary reason he moved, he said was taxes.  Or lack of same.

Washington, at that time, had no state tax, Oregon no sales tax.  His plan was to live in one place and shop in the other.  It’s a plan, but …

Another friend said he expected to live well in retirement even though his income would be reduced dramatically.  He talked about fewer deductions (for things like the TSP, FICA) and lower-taxes on less income. He said he would never buy or wear a suit again. He expected his 3-year-old car would run longer than he would. He said he wouldn’t eat out, need to pay for dry cleaning or have all those other pesky expenses associated with work. Or life. Or fun. Ever! I suggested he join a religious order that made brandy or some such.  We’ve lost touch, but a mutual friend said the retiree now has a long beard, dresses like a rural serial killer and spends most of his days visiting — but not buying anything — at the local shopping center.

At one time, some financial planners said people could live reasonably well on 40 percent of their pre-retirement income if they cut back on things. A lot of things.

Now many financial planners say you will need as much as 80 percent. While your kid expenses may drop (or not!) odds are your medical bills will rise.  Unlike violins or some wines, most people don’t get better with age.

So how do you plan?  Does it make a difference whether you are under the FERS or the CSRS or offset retirement programs? Short answer: Yes.

When you joined the TSP, how much you put in (enough to get the total 5 percent max), and how you invested can be critical in retirement.  When FERS was created (with its toned-down civil service benefit) it was thought that investments in the TSP would supply anywhere from 33 cents to 50 cents of every dollar you have in retirement.  That’s not chump change.

So how do you plan?  What do you look for? And is it too late for you?  Today’s guest on our Your Turn radio show is Tammy Flanagan.  She’s  columnist for Government Executive magazine, and works with the National Institute of Transition Planning. And a recent retiree herself.

She’s also the creator of the what’s-the-best-date (or dates) to retire.  Picking the best can mean extra money — in some cases a lot — as you start off in retirement.

The show begins at 10 a.m. (ET) today.  Call in if you have questions or email them to me at: mcausey@federalnewsradio.com.

Nearly Useless Factoid:

By Michael O’Connell

The State of Oregon instituted prohibition on alcohol in 1916 — three years before the national ban was approved.

Source: Blue Book

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