There’s no doubt that a retirement crisis is on the horizon. For a significant portion of American seniors, making ends meet is challenging enough – retiring on time is another story altogether. According to one study published by GoBankingRates, as many as thirty percent of people age fifty-five and older have nothing saved for retirement. If you’re not sure whether or not you’ll be able to afford retirement in the near future, check out the following suggestions on taking action – and make sure to also consult your financial advisor.
Assess the Situation
Before making any rash decisions or sudden life changes, take a step back and look at your situation from a different perspective. Calculate a budget, find out how much money you can expect to make annually, and then figure out what it will take (and how soon it will take) to reach retirement. Don’t forget about your other assets. Determine your expected cost of living and assess new means of earning income as well. If you can manage to get by with just a bit less every month, you’ll be that much closer to retiring in the next few years.
Find Work You Love
Sometimes called an “encore” career, finding a satisfying part-time job to occupy some time and maintain a steady flow of income may allow you to lead a less stressful life that feels more like a hobby and less like a chore. Teaching, working as a librarian, helping out as a personal care aide, or working as a medical assistant can all be fulfilling part-time jobs for active seniors. Combining your passion with a paycheck will make the work much more bearable and even enjoyable. After all, there are few things more fulfilling than doing something meaningful.
Take Advantage of Opportunities
If you’re still strapped for cash and eager to find more ways to save, consider the following methods:
- Shop for new Medicare coverage – As prices shift and laws change, your current Medicare plan may be outdated. Look for new offers in order to shave a bit off your bills.
- Consider delaying Social Security – Although you are eligible to begin collecting Social Security as early as age 62, you may be able to collect even more by waiting to draw from the account for a few years.
- Shop less frequently – Rather than visiting the grocery store two or three times per week, go once. This will help by keeping impulsive purchases to a minimum. Just make sure you use or freeze the food you buy before it goes bad.
- Refinance your existing mortgage – With interest rates at historic lows, lowering your monthly payments may earn you considerable savings over the next several years.
- Cut back on phone services – Decide whether or not you really need a home phone. If your cell phone will suffice, think about canceling your home phone services.
- Look for age-based discounts – Movie theaters, museums, carnival attractions, concerts, and other venues often feature senior discounts. Whenever you can, take advantage of these savings.
- Barter – Before going out to buy a new and expensive household appliance, check the internet for cheaper offers. When possible, barter for the best prices you can get.
Consider a Reverse Mortgage
Many baby boomers enter their retirement years with one major asset: their home. If you’ve poured thousands of dollars into your home over the years and amassed significant home equity, a reverse mortgage will allow you to access much of that equity while remaining in your home. Under normal circumstances, you would have to sell your home and move elsewhere or take out a different kind of home equity loan to tap into your accumulated wealth. However, by getting a reverse mortgage, you will also be able to gain access to these funds while simultaneously eliminating any existing mortgage on your home. Best of all, you will still own your home. Just make sure to stay on top of property taxes, homeowners insurance, and maintenance expenses.
Nowadays, reverse mortgages come in all shapes and sizes. As long as you’re 62 years of age or older, own your home, and are capable of meeting financial responsibilities such as paying property taxes and homeowners insurance, you may be eligible to receive a reverse mortgage. Between fixed rate and adjustable rate loans, there are several options to choose from – depending on your situation, you may prefer an immediate lump sum, a monthly stream of extra income, or a line of credit. Reverse mortgages have evolved into flexible financial tools that can bolster your existing retirement plans or enable you to reach retirement much earlier than would have otherwise been possible. Regardless of how you look to retire, we wish you the best of luck.