Before you Retire - What you Should Know
72According to the Employment Benefits Research Institute, over 80% of Americans are not ready for retirement. It has been reported, that less then 27% of American have $10,000 saved and 67% report having less than $1,000 in their savings accounts.
Since the recent financial decline, thousands have lost their stock portfolios; now even more Americans then ever are ill prepared for retirement. It you have not already begun, now is the time to cut spending, begin to budget you money, start a savings plan and to get out of debt.
There are some practical things that can help you survive and thrive you senior years, if you are willing to take the proper action.
Don’t depend on Social Security.
Retirees and others receiving Social Security benefits can not depend on the security of these benefits. Also for the second year in a row there will be no cost of living increase in benefits for the year 2011.
Seniors who live solely on Social Security benefits are more likely to be amongst this countries low income and poor. Social security is basically a fixed income and can not be depended to sustain you in emergencies, and with growing inflation. Start saving now if you have not been planning for retirement.
Don't Bail out your Kids
Bailing out your kids, can put
you in a terrible predicament when you retire. It may hurt you to see your children suffer financial, but they have the
rest of their live to recover financially. The money you have put aside is for your security and welfare.
Your children's earning ability has just begun, while your ability to earn is rapidly declining. If you are over 50, do not put your adult children’s financial needs before your own. Thy may suffer some discomfort or even have to file bankruptcy, but they will survive.
Also, don't take out a loan for your kids; you will need that credit for your own financial emergencies. Often, when parents put out a chuck of money to help their children, hey will never see it again.
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Don't Dip into your 401k
Your 401k Plan is put aside for your retirement. If you constantly dip into it for every little thing, you will have nothing left for latter.
There are many who have used their 401k to pay for braces, Christmas emergencies and other no-essentials, only to find they had little or nothing remaining for the most vulnerable part or their lives.
Look for the money elsewhere, and leave your 401K plan alone. Also every time your remove money you also have to play a penalty.
Don't Keep the Large Home
If it is only you or you and your husband, consider downsizing your dwelling place. A large home cost more to heat and cool and a large mortgage and property taxes is the last thing you want to deal with with retiring.
Downsizing into a condo or smaller how and put the profit into a savings vehicle. Once the children are gone, you don’t need a five bedroom monster of a home. It is understandable that the home where you raised your family will have sentimental value, but it is more important to be able to live well in your remaining years.
Sell you larger home and move into something smaller and more manageable. A smaller home will have a smaller mortgage and taxes won’t eat up your retirement money.
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Don't Forget to Plan for Illness
Even though you have been healthy your whole life, things happen as we get older. All it takes in one accident of medical problems that can force you into early retirement.
Consider long term care and sufficient medical coverage that will provide for you when you can not work of after you have retired.
Unforeseen medical expenses and a lack of insurance benefits, is the main cause of bankruptcy for seniors. Try to make sure to have enough medical coverage through your job and consider purchasing a long-term care policy.
A long-term care policy can help prepare for illness and disabilities during old age. The best time to purchase a long-term care policy is in your late 50’s to early 60’s, before you begin to have medical problems.
The earlier you purchase the policy the cheaper
the policy will be. With a long-term care policy
you can arrange to stay in a retirement facility or receive care at home. Most people prefer to receive care at home
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"Don't bail out your kids"- funny, but I'm the one being bailed out by them in my retirement. I still have 3 years to wait before I receive my monthly pension and they are more than willing to support me financially. I keep my money in the bank for "urgent" needs only, so they say. Some down-to-earth tips I can share to them. Thank you.
Some great tips here - the social security is real important in todays environment especially when the US hasn't moved towards austerity like Ireland, Britain and France and we are more tenuous.
kimh039, thanks for your comments!
You are right katiem2. Start to prepare not, if you haven't yet.
Thanks for the reminders 2b3sure. I liked the stats at the beginning, and the practical advice that followed.
It's never to late to plan for retirement. Thanks for the great do's and don'ts for preparing for retirement!
2besure Hub Author 18 months ago
Lita, thank God for children like yours. You are a blessed mom indeed!