Retirement! Now you have more time for travel, visiting the family, and taking up new sports and hobbies. You are free of the alarm clock, bosses and daily commutes to the office. However, if you have not prepared your finances properly, then you may be facing some serious challenges that will take the joy out of your retirement days.
The Majority of Seniors are Unprepared for Retirement
According to the Census Bureau’s Supplemental Poverty Measure, 6.1M Americans over the age of 65 are living in poverty. After looking at the statistics, it does not look like the situation is going to improve. The Employee Benefit Research Institute says that 60% of workers aged 55 and older have less than $100,000 saved for retirement, and 24% have not even saved $1,000. This means that many retirees are dependent upon social security which, even when combined with savings may not be enough to help you weather the burden of cost of living increases, reduced income, economic slowdowns, social security system insecurities, and rising medical care costs.
Women particularly feel the impact of these figures. In 2012, 55% of adult social security beneficiaries were women. Additionally, women live five years longer than men on average, making them more likely to outlive their pension benefits and private savings.
On top of all of this, government changes in health care, including Medicare, mean that out-of-pocket costs are increasingly causing more seniors to become economically vulnerable.
Many retirees, similar to many Americans across the age spectrum, are carrying significant credit card debt. Now that you are on a fixed income, with less money coming in each month, you may have trouble paying the bills.
What Can You Do to Ease the Financial Challenges of Retirement?
There are many organizations and consultants that specialize in senior financial issues. These are just a few simple suggestions to get you started.
- Now that you are on a fixed income, it is a good time to redo your budget. Make a realistic accounting of all your fixed expenses vs. your income, including a review of your health care and insurance plans.
- If you can no longer pay your credit card bills, don’t be tempted to increase the number of cards you hold, charging one to cover the payments on another. Your credit card debt could soon overwhelm you and damage what may have been a stellar credit record that you spent your lifetime building.
- If you need a personal loan, or need to consolidate your debt, turn to one of today’s more successful alternative lending resources, such as peer-to-peer lending. P2P lending platforms are not banks. They offer fast, uncomplicated personal loans to help you with credit card and other consumer debt, medical procedures not covered by your health insurance, and even home improvement.
- Energy costs are a big drain on your financial resources. Conserve, insulate, upgrade to green technologies, and ask your utility company to conduct an energy audit to locate places where you can improve energy efficiency in the house. Set up a budget plan with your utility company so that you pay the same amount every month.
- Identify and take advantage of all senior discounts, such as on transportation, consumer goods, groceries, entertainment venues, etc.
- Join senior organizations, which, in addition to keeping you informed about changes in government programs, offer great benefits such as insurance, travel, mortgages, car loans, and more.
With planning and sensible adjustments to your financial plans, you can still have the retirement of your dreams.