Welcome back!
Recently, I have noticed a growing number of seniors who either have continued working out of necessity after their retirement age, or have retired only to find they must make drastic changes in their lifestyle because they failed to plan financially.
Because life expectancy has increased, many people are living much longer than in the past, or than they originally anticipated. Unfortunately, they find they have to live at a lower standard of living than they had become accustomed to during their work years.
In most cases, obtaining the proper financial education ahead of time would save many seniors from the shocking lifestyle adjustments they did not anticipate or were not prepared for.
According to Jean Setzfand, director of financial security at AARP, “There is not a good system to deliver financial education or enhance financial literacy for older adults once you leave the workplace. Older adults, especially those who are retired, turn to more informal resources like friends and family and caregivers.”
Here are a few financial suggestions for baby boomers and younger seniors to consider prior to retiring:
- Build a nest egg. While you are still working, build the largest nest egg you can through work-related savings plans or other financial programs. Consider putting a certain amount into an annuity that guarantees you regular payments the rest of your life.
- Become debt-free before retirement. Pay off your mortgage and credit card bills so that you go into your retirement years as free of financial burdens as possible.
- Delay retirement. Work as long as you can to gain a larger Social Security benefit, as well as give you time to save more money. Use accrued vacation time for travel.
- Control your own money. Do not give financial control to anyone other than a trusted family member. Do not turn over your finances to someone outside the family just because they promise large financial gains. Think Bernie Madoff and his scheme.
- Beware of scams. Whether through phone calls or door-to-door visits, many seniors fall prey to those who will tell any story that will have your money going into their bank account. Only donate money to proven charities through legitimate channels.
- Consider your outflow. Cut down on expenses where possible before you retire. If you are used to living on a certain income while working, make sure you can live within your retirement income. There could be quite a lifestyle jolt if you have not planned for the difference in income after retirement.
- Downsize prior to retirement if necessary. If your house is larger than you need, consider selling it and buying a smaller house or condo. If you are driving a large SUV or high-end car, consider downsizing and paying off your vehicle. Make sure you buy a newer model car before retirement, unless you know you have the finances to replace an older model later on.
With careful planning, you will not need to make drastic changes in your lifestyle. However, if you fall to plan, how you must live after you retire can be quite a shock. Many people soon discover they should have made better plans for their later years. Life passes by very quickly, and those who have failed to plan pay the price in a much different lifestyle than they were expecting.
It pays both financially and emotionally to plan for your retirement. Becoming more money savvy before retirement rather than after will prevent an unexpectedly lower level lifestyle than anticipated.
![Reblog this post [with Zemanta]](http://img.zemanta.com/reblog_e.png?x-id=616a201e-88e6-4dea-9985-556c1123b8e6)
