Unless a person wins the lottery or inherits a large sum of money, it is safe to assume that most people know that planning for retirement is a very important thing to do. Planning and saving money for the future is a topic that has been drilled into society’s head, especially since the workforce landscape changed in the 1980’s and 1990’s.
Prior to the introduction of the portable 401(k) plan, many people would spend their entire career (which could be 30 years or more) with one company and then receive their pension when retired. That provided a certain type of “security” which faded as the portable 401(k) plan started being offered by companies.
These plans are positive for anyone who wants to change jobs and take their savings with them, but unfortunately not everyone takes advantage of them early enough – or at all, in some cases – in order to save enough money to retire comfortably and at the desired age. The US average life expectancy is now 81.2 years for women and 76.4 years for men, which makes time a liability in regard to planning for retirement.
How is anyone expected to juggle financial responsibilities like home mortgages, bills, children and their education, while trying to also save money for the future? And how do those who were affected by the housing crisis in 2008 and 2009 bounce back from their financial losses so they can save for retirement?
There are a few options that experts suggest in order to stretch money during retirement years. These tips will help those who need to live in an Assisted Living community, like MorningSide of College Park, afford it when the time comes.
• Start Saving Early – Saving for retirement can never start too early. When young adults begin working, it is very important that they begin contributing to their 401(k) in order to begin compounding interest.
• Consult Professionals – Financial advisors can be very helpful when planning retirement. A “fiduciary” is legally obligated to offer advice and act in the best interest of their client, and can help plan retirement in a way that may save or defer tax burdens.
• Save Extra – There are people who are confident they are saving enough money to last through retirement, but they may not factor in medical emergencies, job loss, etc., which is why it is important to save even more than necessary.
• Don’t Rely on Social Security/Medicaid – The US News & World Report states that fewer people will be working to support retirees by 2050. One in six aging Americans live below the poverty line, which means the probability is high that the safety net will be strained as well.
• Keep Options Open – There may come a time when seniors must consider ways to finance their care, and flexibility could play an essential role. Some options to consider during this time are selling a home, living with a companion, and getting a reverse mortgage or low interest bridge loan.
Additional advice from experts includes: continuing to work after retirement, staying active and healthy in order to reduce health risks and medical bills, obtaining Long-Term Care Insurance, consolidating debt and paying off credit cards, and cutting back on spending. The last suggestion seems obvious enough, but it does take willpower and discipline.
Procrastination will only delay the inevitable. For seniors who want to travel, remain self-sufficient, and leave no burden on their family, it is imperative to plan ahead in addition to saving continually. Saving today will pay off when the time comes. Literally.
To learn more about MorningSide of College Park, call (844) 511-3456.
Written by Kristen Camden