Until recently people used to welcome retirement as an extended vacation, a time for complete relaxation and leisure. Retirement meant globetrotting or pursuing a new hobby. However, today people are working out the calculations associated with retirement and they are increasingly alarmed while doing the math. They have realized that all is not pink and rosy post-retirement. They may not be financially secure and their future seems bleak and troublesome. As per an article on https://www.forbes.com, only 39 percent of the people in the United States have considered figuring out the exact amount they would need to keep aside as savings for retirement (FINRA). Moreover, just 58 percent have retirement accounts. Hence, you need to think seriously about ensuring financial security even after retirement. It is never too late to start investing wisely in your future.
Ask yourself are you ready to retire? Can you afford to retire? As per the findings of research done meticulously over the past few years, most people could not display financial readiness to retire. This only proves that building up enough retirement savings could be an extremely challenging process that necessitates careful planning, constant monitoring, and follow-through. Let us examine certain helpful tips for ensuring financial security post-retirement.
Start at the Earliest Possible
It is always a great idea to start saving for retirement early in your life, however, there is always scope for a new beginning. Even if you are heading to your retirement, start saving since every penny that you save now would help you in covering your expenses. Suppose you keep aside just $200 per month for 40 years at just 5 percent rate of interest, you could save a substantial amount by the time you approach your retirement and the amount saved would be much more in comparison to someone who saves the same amount at the same interest rate for just 10 years. However, even if you are starting late, do not lose heart. Be serious about start saving a substantial amount every month. Be determined to do this no matter what.
Chalk out a Plan but Remain Flexible
It takes perfect planning to enjoy financially sound and secure retirement years. You must examine all your assets, investments, savings and aspirations as in retirement goals. Determine what sort of lifestyle you would like to lead, what would you like to do and where would you like to stay, etc. You must chalk out a concrete plan of action. However, even though you need to stick to the plan, you must exercise a certain degree of flexibility so that you are more open to unanticipated changes. You must stay abreast of the latest trends and developments in tax laws, cost of living, real estate, investments, and all such areas that may impact your overall financial well-being.
Mind Your Spending
Do not splurge. Overspending could be a costly mistake for numerous retirees. You may be excited at the thought of not working anymore but at the same time, you need to realize that you do not have the same financial freedom to splurge on dining out, traveling, shopping, and investing money on leisurely pursuits. It is of critical importance to create a strict enough budget and try to be determined about sticking to it. You do not need to avoid certain treats and entertainment. You are free to enjoy life but avoid going beyond your means.
Give Top Priority to Getting Out of the Debt Trap
The most effective way of improving and boosting your overall financial condition is to reduce your existing debts. Debts could be truly draining post-retirement when no monthly salaries are coming in. You must determine ways to effectively minimize your existing debts particularly, all your high-interest outstanding credit card balances and debts.
Effective debt management could culminate in two major benefits. It would effectively cut down the heavy stress of making huge payments when your income has gone down. Moreover, you get an opportunity to boost your credit score that is useful if you are thinking of applying for a business loan, mortgage or some other kind of loan in the years to come. Seek expert debt relief solutions from reputed companies such as NationaldebRelief.com.
Explore and Determine New Income Avenues
It is a rather sad fact that Americans and numerous other people from some other nations are constantly postponing retirement simply because they know that they are not retirement ready and cannot afford to give up working or earning money at this juncture. However, some employees are compelled to retire in some organizations. There are certain alternatives to complete retirement and working full-time. You still have some revenue sources even after retiring.
- You could obtain a part-time job that helps to keep you active but gives you adequate rest, and a scope to earn some money.
- Consider starting a business. Today there are several businesses that you could consider starting from the privacy and comfort of your home such as selling on eBay or Amazon or even providing freelance services.
- Generate some fresh funds by renting out a spare room or space or consider setting up an Airbnb.
Consistently Reassess Your Portfolio
As you advance towards retirement and as your expenses, financial requirements, and even risk tolerance change, you must devote time to strategic asset allocation on your portfolio for allowing any mandatory adjustments or modifications. This could be helping you in ensuring that your retirement planning is perfect.
Seek Professional Services of a Financial Planner
Unless you are qualified and experienced in portfolio management and financial planning, it is a good idea to seek professional assistance and advice from a qualified and experienced financial planner. You must do a thorough background check and do proper research while choosing a trustworthy and competent financial planner who best caters to your unique requirements.
If you wish to enjoy financial security during your retirement years, you must remember not to start using funds from your retirement account before time. You may be quite tempted to withdraw some funds early from your retirement savings but it is rarely a wise decision. Abstain from making such a decision. You must downsize your home and lifestyle if need be. All the tips discussed here should go a long way in ensuring financial security to you even after retirement.