First Person: Preparing for Retirement Without a Stock-Based Plan

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These days it seems like there's hardly any other options for retirement planning other than the stock market. And while most of us may almost find ourselves forced to take some role in a stock-based retirement plan, I laugh when I watch programs like The Suze Orman Show where numbers in the millions are quoted to people if they continue to invest their money in the stock market…as if there won't be any bubbles popping over the next 30 years and a consistent 8 percent return is the expected norm rather than just a possibility.

I haven't given up on looking for ways around stocks as the only path to retirement though. And here are some of the things that I do to stay focused on a secure retirement future yet not necessarily make the stock market the only path to get there.

Keeping Costs Low and Knowing Where to Cut

Having the ability to keep costs under control, and knowing where to cut if or when needed means there is a lesser dependence upon income from the stock market or stock market-based investments in retirement. It also means that more money can be put into savings where it might face inflationary pressures but is largely safe from bursting bubbles or fund management fees.

I work hard at keeping our controllable costs down. Of course things like our monthly condo association fee, parking expense, home and vehicle insurance, and similar expenses are pretty much set, but other areas of our budget tend to offer a little fat to trim. Otherwise though, I tend to keep expenses to the bare minimum when it comes to discretionary spending. By doing so, I manage to keep a cost of living that is below our means, which in turn allows us to save a little cash rather than dumping it into the stock market.

Food and entertainment, utilities, travel, vacation, and miscellaneous expenditures offer up the biggest budget lines for cutting discretionary spending. By moving forward toward retirement while keeping these sorts of costs low, it allows me to better prepare for a time when I'm faced with a fixed-income type situation.


An education doesn't always have to come from a college or university. It doesn't even have to hinge on a standard classroom setting or structured teaching environment. These days, with the prevalence of the internet and a tough job market there is a sort of combination of variety of options in self-education paired with many people being sort of forced to do so because of lack of standard work roles.

While such a situation can be tough, since learning and self-teaching can be hefted upon my shoulders, these days there is no lack of potential learning opportunities. If I want to learn something new, I can head to the internet and research, study, and learn at my own pace. In this way, I've learned all sorts of things that have helped me to make money and that will continue to help me make money outside the stock market realm. I've learned news ways to save money. I've learned how to become self-employed. I've learned about antiques and collectibles. I've learned about resale options and opportunities when it comes to local resale stores and consignment shops. I've learned how to fix things and make home repairs myself.

This type of investing in myself not only helps me save money, but make money as well. By becoming for self-sufficient, I reduce my dependency on others to make money for me through things like stocks or retirement funds.

Preparing for Longer Work

Without the potential benefits of a stock market-based retirement plan there might be a need for working later in life. While a market-based retirement plan can be volatile at times, it's one of the few ways to at least have a shot at some significant gains over time. Without such a plan, I think there needs to be a clear realization that I might be forced to work later in life to compensate for this loss of potential income.

I'm however willing to trade some extra work hours for the possibility of reaching retirement age only to lose 40 or 50 percent or more of my retirement plan in a bursting bubble. This is a tradeoff I'm willing to make, and by doing so I can not only continue earning and saving money but hopefully increase the amount of Social Security I'm eligible for in retirement.

Looking for Other Asset Options

While the government or the financial industry might want me to think that stocks are the only option out there to put my money to work for retirement, it's not. There are a variety of other options -- which while maybe not replacing a stock market retirement plan in full -- could at least provide opportunities for diversification into other investment areas.

Personally, I look at physical assets such as antiques, land, long-term physical commodities, art, and collectibles as possible replacements to the stock market. While I'm not willing to put all my savings into such assets, they provide yet another avenue of diversification and protection against a single market-based plan. And while stock and bond fund values can disappear in the blink of an eye, I am able to protect these other asset value options not only with their physical form but insurance against their loss in the event of a fire, theft or similar loss event, something that's not available to me in a stock market-based retirement plan.

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The author is not a licensed financial professional. The information provided in this article is for informational purposes only and does not constitute legal or financial advice. Any action taken by the reader due to the information provided in this article is solely at the reader's discretion.

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