This Isn’t Your Parents’ Retirement

A retirement that is financially secure will be harder for you than it was for your parents no matter your age. There are a number of people that have not saved or planned well enough. There have also been a number of changes that made it more difficult to have a comfortable life during retirement.

Things such as living longer, medical issues and having more debt than past generations mean that you are going to have to work harder to have the kind of peaceful retirement where you can afford to rest instead of working until you are no longer able to perform the job.

Longer Lifespans

People are living longer now meaning that they will need more for retirement. The average lifespan has increased by almost a decade as a result of improvements in modern medicine. Health is associated with how well people prepare to retire. It takes a lot of money to live into your eighties with the cost of living continuing to rise. The average person plans on retirement income by how long they think they will live and what they expect their expenses to be.

Get a Financial Advisor. Someone recommended by a colleague, family or friends, who is certified can assist you in meeting your financial goals for retirement.

Home Modifications

More people are deciding to stay in their own homes after requirement. This means that there could be modifications required as time goes home to ensure the safety of the home for aging residents. Things such as handrails and shower chairs will add up in cost, most people do not include these items when budgeting for retirement.

These should be done before you retire so that you are not spending money out of your retirement to have them completed. Do one project at a time to help keep yourself from taking a large financial hit. You also need to be where you can obtain emergency services easily should the need arise.

Increased Debt

No longer are people entering into retirement free of debt. Today seniors are still paying on their homes and credit cards. Some people even into into retirement with medical bills hanging over their heads.

Paying down debt can be difficult but it can go a long way to ensuring that the retirement years are more comfortable financially. It is important to live below your means rather than above them if you want to enter into retirement without debt. Don’t tackle all of your debt at once, focus on one thing at a time.

Unplanned Retirement

There are those who will end up retiring earlier than they had planned. Things such as injuries, illness or company closures and layoffs can mean that you are out of work and unable to go back which puts you in need of more money to live off of during retirement.

Even if you have planned and saved the chances are that you did not plan for retiring ten or even two years earlier than you originally planned. This means that you might need to find ways to supplement your income just to keep your head above water.

No Pension or Retirement Plan from Company

A lack of traditional pensions means that retirees are no longer guaranteed a specific monthly payment at retirement. Some companies do not offer any time of retirement plan for workers at all.

This means that it is up to the individual to determine how much they need in retirement and save it themselves. This often requires someone to help you, and it is going to cost you to get sound financial advice so be sure to educate yourself.

Lack of Savings

There are those who find that they have not saved enough money or that the money they intended to save went to other expenses before they retired. This can be contributed to by not separating savings for retirement from emergency savings.

Do not touch your retirement fund no matter what. Interest rates are lower than they have been in the past so investments have to be risker. Do not use your savings because the lower rates make it harder to recover the money that you take out.

Find a Way to Save Money

You will have to find a way to save money for retirement if you plan on having one that is restful without financial stress. Do not foot the bill for your children’s lifestyle, let them learn to stand on their own. The younger they are the more time they have to make up for financial loses time you do not have as you approach retirement.

What can you invest in? Is there anything you can do to reduce your expenses to leave room for saving money? Take a look at every expense you have from every possible angle to find out.

Living Alone

Costs have risen and most seniors today are single. One income is rarely enough to take care of expenses while you are employed but it gets more difficult when you find yourself on a fixed income.

There are a lot of people that find themselves working after they retire just to keep food on the table. Getting a roommate can help you to cover the costs associated with retirement and save you both money on monthly expenses.

Full Time or Part Time Work

There are a number of those who work either a full time or part time job after they retire from their main income source. This is a change from years past because the additional income is now needed just to keep up with the rising costs.

There are those who now plan on working well into retirement for both experience and the income that they bring in. It is believed that over half of your current income will be required to live off of during retirement.

Uninformed About Investments

There are those who invest poorly and end up losing more than the initial investment or investments do not earn. A financial advisor can help with the determination of where to invest. You should never invest what you cannot afford to lose.

Are taking advantage of employer matched contributions to retirement plans? You are missing out on extra money if you are not contributing to your own retirement plan.

Settling for Income Instead of Increasing the Potential

A number of people now settle for jobs for the sake of having a job and take minimum wage to survive on. There are those who find themselves working two jobs just to cover expenses and still are not able to save any money. Increasing income increases the amount that you have the ability to save for retirement. Are you looking at all your options?

Ask yourself a few questions:

  • Can you get credentials that provide you with the chance for a raise or a position with higher pay?
  • Do you have anyone to advise you on your career?
  • Can anyone help you with advancement by mentoring you?
  • Are training programs available to you?
  • Do you have college credits that will transfer or a degree?
  • Can you take vocational classes or enroll in an online program to increase your knowledge and skill?

Any of these things can help to increase your earnings potential which can increase the amount of money that you are able to save for retirement. You can take your increased earnings and put more aside for retirement as long as you do not increase your spending habits to match.

The Recession Took Its Toll

Workers lost power when it came to earnings during the Great Recession. Those over the age of 50 and in their 60s were hit the hardest as values of homes and savings dropped drastically. There are people who are still trying to recover. Getting counseling can assist you in fixing your financial situation by pointing out areas where you can decrease your debt without affecting your retirement savings.

Take Action Now. Get help, and do not spend home equity, take out another mortgage or spend what you have saved for retirement in an attempt to get out of debt that has become unmanageable. Obtaining debt to reduce debt can put you in a worse situation that can last longer than the original debt.

You Can’t Rely on Social Security

There is not expected to be anything left in the reserves of the Social Security Trust Fund by the year 2034 unless something is done by Congress. Even if the problem with money running out is addressed your age will affect the amount of monthly benefits that you receive.

Be careful with your strategy because while you can start claiming benefits at age 62 you will typically get more the longer you wait to start claiming your benefits.

Concerns About Health Care

Most people expect their health to decline during retirement and they are afraid they will not be able to remain as active. Dementia is also a fear associated with retiring. Health problems can cause early retirement and additional expenses that insurances do not cover. Prescription costs can be in the hundreds when you experience a serious health issue and help is not always available which can strain an already tight budget.

Retirement today looks different than it did for your parents. Most do not have gardens which makes them reliant on buying food, electrical and medical costs have increased. The decreasing ability to enter into retirement with a home that is paid off and no debt make the amount of money needed during these years more than it was even ten years ago. Preparing early with careful planning and savings will go a long way to make you more comfortable in your retirement.

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