Labor Day, the first Monday in September, is a creation of the labor movement and is dedicated to the social and economic achievements of American workers. It constitutes a yearly national tribute to the contributions workers have made to the strength, prosperity, and well-being of our country. Labor Day also symbolizes the end of summer for many Americans, and is celebrated with parties, parades and athletic events. Continue reading
There isn’t a specific right way or a wrong way in knowing how to handle retirement wishes and aging parent care. It all should be approached from a carefully customized plan developed between you and your loved one. As with anybody, it’s important to note what seniors want.
Boomers, who often assume the role of caregiver, need to get their financial house in order. If you are that Boomer, it is up to you to take steps today to make certain your finances aren’t a burden for your loved ones.
No one has a crystal ball to tell us how long we will live, and because of that it’s crucial to plan for the future and for a time when you can comfortably retire. Doing this means you need to consider your income, expenses and what you want to do in your Golden Years: Do you want to travel? Buy a new home? Simply kick back and enjoy your family home and putter around the garden? Regardless of what your retirement dream is, financial planning is something that needs to be discussed. In fact, planning for retirement should begin when you first become employed, but not many of us in our 20s think of retirement. Regardless of your age, there is no time like the present to plan for retirement if you haven’t already.
If you’re in a caregiving role and are tasked with paying the bills of your aging loved ones or are wondering where the money is going to come from in the event they suffer a health emergency that lands them in a hospital or assisted living facility, you understand the stress that finances can cause. How can you, make certain that if your children are put into the role of caregiver for you that your money will last and that they won’t have that burden?
Here are some ways to do just that and to make your money last:
- Consider downsizing your home. If you raised your children in a large home and now it’s just the “two of you” why not downsize? If you have a smaller home, or move into an apartment you can realize a windfall in savings on utilities, property taxes, insurance and mortgage payments. If you realize a profit from the sale of your home talk with a financial advisor on the best way to invest it to help your money grow.
- Downsize your debts. Pay off your highest interest credit cards first then start paying down the rest of your debts. Financial planners say individuals should strive to be debt-free by age 70.
- If you’re both retired, do you still need two vehicles? Consider trading one, or both, in on a reliable model that you can share.
- When you’re eligible for Medicare, take advantage of the benefit. When you turn age 65 you are eligible to participate in Medicare – a program that covers up to 80 percent of the cost of doctor’s visits and medical expenses.
- Take advantage of senior discounts. If your favorite store offers a discount for seniors, sign up! Ask whether the restaurant you’re frequenting or the hotel you’re staying in offers a senior discount; many establishments may offer one if you ask. Ask your auto insurance provider about discounts it may provide as well.
- It may sound morbid, but plan your funeral. This is not a burden – either emotional or financial – that you want to place upon your children. You can make virtually all of your arrangements with a funeral home and then let your children know what your wishes are and where the arrangements have been made.
- Talk with your financial advisor and see if your money is working for you. If it isn’t ask him how you can diversify in a safe manner that won’t put you at too high a risk for loss.
When you’re making your plans for finances in retirement, make sure you and your spouse or significant other sit down and have a heart-to-heart about the ways in which you will spend your retirement. It can be a stressful time when both partners, who may have been accustomed to a particular work routine, are now faced with seemingly endless hours of “nothing to do” and “too much togetherness.” Talk about, and review those plans as you move toward retirement to ensure you are meeting you needs and goals.
The longer you live the more money you will have to spend, or conversely, the more money you should start saving now to prepare for living into your 100s. Modern medicine and the fact that many diseases and illnesses are able to be caught and even corrected early means that many of us are living longer, and in many cases, healthier lives.
If you’re hoping to live to be 100, how will you make certain you can afford it? The time is now to look at your finances and prepare for a secure financial life in your Golden Years. Here are some steps you can take to make sure you don’t outlive your money:
- Take stock of your spending. Scrutinize your spending for the next 30 days. Track where you’re spending and where you might be able to cut back and put that money into a savings account. It may be easier, and paint a more accurate picture, if you analyze three months’ worth of spending and take an average.
- Talk with your CPA to get a snapshot of the amount of money you may need into retirement. Many individuals believe they will spend less money once they’re retired because they won’t have the expenses for food or commuting and other out of pocket expenses; what they don’t plan for is the money spent on hobbies or travel or leisure, now that you have leisure time. You may also see an increase in your family food budget because you’ll be eating more meals at home than in the past.
- Save as much money, as often as you can. Check on your investments and, depending on your age, invest either more robustly or conservatively. Your financial adviser is your best point of contact for your investment planning.
- Take a look at your lifestyle. Are there items you will want to do once you retire that you don’t now? How much will they cost? Are there activities you do now that you won’t once you retire? How much do they cost? If you plan to travel or take up a new hobby you will want to calculate those costs so you can budget for them. You don’t want to look at retirement as “sitting around the house with nothing to do” time you want to enjoy your Golden Years and pursue hobbies and activities you perhaps didn’t have time for while you were working and raising a family.
- Will you be able to afford to live in your own home? Will you need to downsize or even make arrangements to live in a retirement community? What will that cost? Will it make sense for you to invest in long-term care insurance? Talk with a trusted advisor before you make any decisions on this purchase.
- Get your paperwork in order. Don’t wait until you need a power of attorney or a healthcare proxy or a will – by the time you need it, it will be too late. Talk with your attorney and your family and get these papers drawn up early so they are in place in the event of a health emergency when you can’t speak for yourself. While it may be a bit morbid, you may want to put your funeral arrangements in writing and even get them planned so that your family won’t have to wonder at what your wishes would have been.
- Pay off as much of your debt as possible. It’s best to not have to worry about credit card debt or loans with high interest rates, especially when retirement is drawing near and when your income will likely be lower than it was when you were working.
Taking steps to prepare for living to be 100-years-old is best done when you’re younger and in good health!
Going into retirement and having enough money to not only live comfortably but to be able to do the things you’d always dreamed of while you were working is a delicate balancing act. While you’re still employed, you want to be able to enjoy activities and make the purchases you want, but you still need to set enough aside to prepare for your Golden Years.
There is a way to attain a balance so that you can enjoy your working years while still saving enough for your retirement. Here are some of our tips:
- You need to have a plan. You wouldn’t take a road trip without a map, right? If you have to stop and ask for directions at every turn, you won’t know if you’re being steered in the wrong direction until it’s too late. Just as you need a roadmap for a trip, you need a plan for saving and investing (while still being able to spend now) before you take the leap into retirement. Talk to you accountant or financial advisor about your plans for retirement and ask what you can do now to realize those plans.
- When you are investing in retirement you should be planning to preserve your principal. Many retirees want an income that will sustain them for their lifetime and your investments should take that into account. Being conservative in your investments is likely the best way to go as you near retirement age. The time to take risks is when you’re just starting out.
- Whether you’ve operated with a budget prior to retirement, you should certainly have a budget or some sort of spending plan in place when you do retire. Seeing the amount of money you have in savings or in investments may lead you to frivolous spending now. Work out a budget that calculates any taxes you may have to pay, monthly fixed expenses, medical expenses and/or insurance payments. Once you’ve determined those numbers you can begin planning your budget for “fun” and relaxation in retirement.
- Have a backup plan. Regardless of how well you plan, there may still be items that blindside you and force you to rethink your original plans. Health issues, not receiving as much from investments or having higher than planned for expenses can all throw a curveball into your retirement savings. Having a reserve or an emergency fund may help with this – the reserve is something you hope you won’t have to access, but it provides peace of mind in case you do. A reserve fund could be a piece of property, a home that is paid for or even a collectible that could be sold if necessary, it doesn’t necessarily have to be a cash reserve.
- Have a talk with family members about your plans and even your financial situation so they are aware of your hopes and dreams. Protect yourself from falling for some of the get rich quick schemes that are perpetrated on the elderly. You need to have someone on your side that you can trust to help you with your money and investments if the need arises.
Planning for retirement involves not only your cash and finances, but where you will live out your Golden Years as well. Will you age in place or will you be moving into a retirement community? These are all plans that should be discussed with an accountant and your family prior to your retiring.
You’re “of an age” when you are considering stepping away from the daily grind of a full time job, but you’re not quite ready to spend all of your days on the golf course or watching the grandchildren, what are your options? Well, according to the Small Business Administration, close to 20% of all individuals 55 years of age or older are expected to start their own small business.
If you’ve ever thought about what you’d love to do, “once you retired,” perhaps pursuing a passion and becoming your own boss is the way to go. For many people, retirement simply means stepping away from a career with a company that they may have pursued for the past 20-plus years and doing what they “really want to do,” and that means different things for different people.
Individuals in the life-transition stage who don’t want to give up working entirely but don’t want to compete with their younger counterparts in the ever-dwindling job market can turn their time and efforts toward being their own boss. If you want to start your own business what are some considerations to that endeavor? Here are a few things to consider:
- What do you love? If you have a passion for something chances are you will follow through. Remember, some businesses are more technology based than others and if you’re not a technology lover you may find yourself getting frustrated before you’ve even fully begun the business and will walk away from the idea. Just as you stuck with your career for any number of years, you don’t want to start a business that you aren’t prepared to follow through on.
- What are your goals for wanting to become a business owner? Do you have information to share? Is there a hobby you have pursued part time for years that you now have time to pursue full time? Do you need, or want, more money? Do you want to start a business that will sustain you and your heirs? Are you looking for something that will just keep you busy on your schedule rather than having to “punch a clock” if for example you opened a retail business.
- Do you have experience garnered throughout your life that you can now put into your business? What experiences and expertise have you honed during your lifetime that you can now use to jump start a business of your own? If you don’t have experience, there is nothing to say you can learn about something new, master it and then start your business endeavor. If you’re retired, chances are you will have the time to do just that.
- Will your new business endeavor require large outlays of cash? Do you have the financial cushion on which to draw? Will you and your spouse or significant other be in agreement that this is a good use of your financial nest egg? If you can start your business without dipping into your retirement or mortgaging your home to do it, that is the best way to start.
- Now that you’re retired, did you have an idea in your mind of what your lifestyle would be? Did you plan to drive across the country and not be tied down to a specific location? If you are starting a business will it fit into the ideal you’ve had in your mind for your Golden Years? Unless you are truly driven and want to jump into a new business endeavor with both feet, craft the business so that it is a part of your life, but one that doesn’t take up your entire life – unless you didn’t have any specific plans in your retirement years. Will the new business involve you and your spouse or significant other or family members? Do you want it to? Has it always been a dream of yours to retire then open a bed and breakfast? If so, that could be the ideal option!
There are many business opportunities available for the driven retiree and just because you’re retired from your job doesn’t mean you have to retire from life! What will you do once you retire?
If retirement age is fast approaching or whether you’re worried about becoming a victim of the economy there are ways to have put money aside that will help you enjoy your Golden Years. Even if you are “behind” in saving for retirement you can start today and build a nest egg.
A recently released study shows that fewer than 40% of workers have $1,000 in in total savings and investments. The study also showed that fewer than 30% of retirees had more than $1,000 in savings and investments. When you consider how long individuals are living, thanks in part to medical advances, you can see why it’s critical that you are saving for your long-term living needs.
Even if you having started saving yet, here are five steps you can take today to begin building a retirement nest egg:
- You don’t need to always buy the latest and greatest. Simply because a new technology or vehicle or pair of shoes is introduced to the market, that doesn’t mean you need to own it … just then. Impulse purchases can be the bane of your savings account. You should weigh all purchases on whether you “need” it or whether you simply “want” it. If it’s not a critical need, then it’s best to delay the purchase.
- If you’re still employed and your employer provides a matching contribution in a retirement account, take advantage of that. Invest in the highest amount that your employer will match – it’s like free money in the bank!
- Make it a practice to save 10-15% of your income. Don’t think that you have to wait until the end of the year and then look at your earnings to determine how much to save. Take your weekly paycheck and deposit 10% of that. Once you’re in the habit, you will not miss that 10% that you’re putting into a savings account. It will become automatic and depending on how much you earn annually you could be saving significant dollars by years’ end.
- If you get a raise, immediately bank it. You’ve been living the past year without that raise in your pocket and if you don’t count on spending it now, you can continue to live as though you hadn’t received a raise. Consider putting any bonuses or tax refunds into a savings account as well.
- Pay off your debts wisely. Consider this: you’re saving 10% of your income but you’re paying credit cards with interest rates of 18-25% percent! You’re never going to get ahead. Pay off the highest interest rate cards first. Find a second job and devote all of the money earned from that to paying off the high interest rate credit cards. Your budget will thank you.
Enjoying life in retirement means many things to many people, but being able to live in the manner to which we have become accustomed is something that all of us want to do. What steps can you take today to make that a reality?
Change is typically front of mind for many when the calendar flips to a new year. If you’re in the Baby Boom generation, chances are you are also in the so-called Sandwich Generation. What is the Sandwich Generation? It’s that crop of Baby Boomers that are raising children, pursuing careers and taking care of aging parents.
If you’re taking over the financial responsibility for your parents you may find strategies they employed that make sense and that you will incorporate. However, you may find that your parents simply didn’t plan carefully enough for the future and with the potential for nursing home or assisted living costs looming, financial conversations need to take place sooner rather than later.
As a 50-something there is no time like the present to implement a financial strategy for yourself and your family. What can you do today? Here are some strategies:
- Understand how much you have “banked” for Social Security for when you retire. In the past the Social Security administration would mail out statements letting you know what your expected future benefits would be. They are no longer mailing statements but you can go online and see the amount you may collect when you retire. Go to www.ssa.gov. For many people, Social Security will not be enough to live comfortably on and that’s why there is the need to plan for future living expenses as you age.
- Look at your budget and determine whether you can put additional money away in a savings or retirement account. Even a modest increase in savings can add up in helping your retirement be more fiscally secure. Don’t forget to ask your accountant how much you can deposit into a retirement account to adhere to the IRS guidelines.
- Talk to a financial planner to see if you are on the right track for retirement. Do you have a true picture of your income and expenses? Do you know how much you need to live comfortably? Once your full time income is gone after you retire, where will you need to make cutbacks in the family budget and are those cutbacks items you can live with? You should know where your retirement income will come from and how much it is and compare that to expected expenses. If you plan to age in place you will also need to factor in home maintenance expenses and potential increases in utilities because you will no longer be out of the house at work.
- Are your investments working for you? You want to have an investment portfolio that matches your individual style, whether you are an aggressive investor or whether you simply want your money to grow at a steady pace. Understanding your investment style, though will help you determine your financial status once you retire and begin living off of the investment income.
- Determine whether it is worth it to you and your family to invest in long term care insurance. Have a plan in place for the time when, or if, you or your spouse can no longer live independently. Will you have the funds available to move into an assisted living facility that you prefer or will your finances force you to move into a facility in which you’re not happy?
If you’re in the midst of gathering up your paperwork to meet with the accountant and file your taxes, now is the ideal time to take a good, long look at your finances and make certain you are planning for your future.
Effectively managing your finances following retirement and into your Golden Years brings with it challenges that need to be addressed so that you can continue to live the lifestyle to which you’ve become accustomed. One way to do this is to begin planning for retirement early in your working life and to work within the confines of a budget once you retire. Living within your means allows you to enjoy the perks you had when you were employed while still keeping a comfortable nest egg. Maintaining long-term financial stability requires thoughtful planning and may involve making changes to your daily lifestyle. Remember, financial planning for your retirement and senior years is more about long term goals than short-term.
Here are some money management tips to put into place prior to retirement. If you’re already retired, these are tips that can be implemented even now to help you enhance your financial stability:
- Clear up your long term debt. Pay off your mortgage and pay down your credit cards. Revolving debt can wreak havoc on your savings. Having to worry about making monthly debt payments can negatively impact your long term financial stability. Additionally, knowing that your debts are paid off, or paid down, will add to your peace of mind.
- Writing and sticking to a budget. To remain financially viable into your retirement you will need to live within a budget. Take time and make certain you include all of your expenses when making your budget. Include items such as health insurance, auto insurance and long-term care payments in addition to the income you’re bringing in.
- Take care of your health. Illness can negatively impact not only your overall health but your ability to remain within your budget. Eating healthy meals, remaining active and having regular medical check-ups will go a long way in helping you enjoy your retirement years.
- Stay involved. Volunteer, take a class at a local community college, visit neighbors and friends. Remaining involved with friends and continued learning leads to better mental acuity and could even ward off health related mental deterioration.
- Do you need to downsize? If you’re still living in the home in which you raised your children, it may be time to consider downsizing to a smaller, more efficient home. Whether you move into a small home or an assisted living or retirement facility, taking the time to address trip and fall hazards and upgrading the bathroom and other rooms in the house to be senior friendly make the home safer as you age. Individuals that may be living alone or dealing with balance issues or other health concerns may want to consider equipping the home with a medical alert device as a way to have immediate access to health care in the event of an emergency.
Prior planning will help you enjoy your retirement years with grace and ease.
There is never a wrong time to begin tracking your income and spending, but truly the more thoroughly you understand your money habits and gain control of your budget, the more quickly you will be able to take charge of your future. When retirement is just around the corner, you may feel you’ve lost valuable time to gain control of your finances, but there is still time.
Here are three strategies to help you set up a workable budget and stick to it:
- Save more money. This may seem a simple solution, but in many cases the simpler the solution, the easier it is to implement. Once you’ve charted your income and expenses, you can look at what’s left over and make a decision to bank 10 to 20% (or more) of your income. If you find that 10% is too much, start smaller and work your way up. Being successful at socking away 3% of your income weekly will help you build toward a higher percentage going into your savings on a regular basis. Once you discover that you can live without that additional 3% or more you can move your savings amount up to the ultimate goal you’ve chosen.
- Spend less money. Saying you’re going to “save money and cut expenses” is a vague generalization and won’t offer a measurable goal. Set a specific goal of, “I’d like to spend $10 a week less on take-out food,” or “We’re not going to use a credit card for purchases of less than $100.” Those goals are measurable and achievable. Unsubscribing to department store emails and updates may help you save money because you won’t be tempted to give into an impulse purchase. Also, before you make a purchase over a certain dollar amount, take time to ponder that purchase. Studies show that individuals that don’t give into an impulse purchase, but who instead take a few days or a week to determine whether they truly need an item will spend close to 25% less annually than those who purchase on impulse. Consider the impact on your long-term financial goals before making a purchase of a large ticket item.
- Pay down your debt. Paying down credit card balances, especially as you near retirement age, makes incredible financial sense. Paying down your debt also allows you the opportunity to put more money into your bank account. In addition to freeing up your money, paying off debt can also lower your stress simply because they won’t be looming over your retirement years. You may need to put the brakes on some of the activities you currently enjoy such as dinners out with friends, splurge purchases, etc. Look for free or low cost entertainment options, invite friends to a potluck at your home, take time to consider whether you truly need that large ticket item. If you know, for example, that you have set a goal to pay cash for all purchases of $50 or less it may make you pause to consider whether you need to make the purchase at all. Putting an item on a credit card rarely requires thought and is usually not thought of again… until the bill comes due.
Having sound financial practices in place prior to your retirement will help you more fully enjoy your golden years.