Retirement is something most people look forward to in the later years of their careers—time to relax and enjoy the fruit of many years of labour. Bringing the dream to fruition requires careful planning and wise decision making. Avoiding pitfalls and planning for success gives seniors freedom to meet their retirement goals without money related stress.
Pitfalls to Avoid
There are common themes in the lives of seniors who find themselves experiencing financial stress.
1. Living Beyond Means
It’s easy to get used to a certain lifestyle; travel, eating out, and entertainment can be hard to give up. Upon retirement, many people attempt to keep the same lifestyle despite a lower income.
2. High Levels of Debt
Many adults find themselves with higher levels of debt than they would prefer to have prior to retirement, due to a number of factors. While it might be manageable while they still work, a drop in income after retirement may make it tough to keep up.
3. Supporting Family Members
It’s not uncommon for parents and grandparents to support loved ones financially. While it might feel good, once retired it may not be feasible. Consider your long-term financial health before offering to lend a hand.
4. Cost of Living
No matter where you live, cost of living increases over time. As prices for rent, food, utilities, health care rise, lifestyle adjustments may be required.
Solutions that Work
1. Ask for Assistance
Managing your finances can be overwhelming as retirement benefits kick in, and investments come due. Don’t be afraid to ask a trusted loved one to review expenses and income and identify problem areas and opportunities for saving.
2. Speak to a Financial Planner
Bringing in a professional voice to review and advise on finances is a decision better made sooner rather than later. A financial planner will be able to objectively look at finances and identify ways to save and manage money in order to see retirement dreams become reality.
3. Get a Joint Bank Account
A joint account can be an excellent tool for those who may encounter health issues or who work closely with loved ones to handle finances. This kind of account allows multiple people to have access at any time, meaning easy access for deposits, withdrawals and fund management. Trust and clear communication are essential for this arrangement to be successful for seniors and their loved ones.
4. Consider Your Home
The decision to keep or sell a family home can have a significant impact on finances in retirement years. Wise investment can mean sustainable income for years to come. Research your options, you might be surprised at what you discover.