An increasing number of older Americans are worried about making ends meet as they approach their golden years. The recession has severely impacted many nest eggs, and with it, plans for retirement. Add to this the rising cost of health care and the fact that many people older than 55 are not sure how much they need to save to maintain their standard of living, and the prospect of retiring seems farther away than it should for many.
Whether you plan on working for several more years or will retire shortly, meeting with a financial planner is your best bet in strategizing and readjusting your budget and portfolio. In the meantime, here are some general tips (ranging from cutting down on spending to reviewing life insurance) that you can follow to reach retirement sooner and enjoy it better:
* While nearly one in five have withdrawn retirement assets to pay off credit card debt and make mortgage payments, experts say that should be a last resort. Do everything you can to avoid tapping into your retirement savings – that nest egg is more important than ever.
* If your retirement funds are not going to allow you to maintain your current standard of living, consider retiring later or working part time after you retire. For many, a part-time job after retirement not only brings in extra cash but also provides social and learning opportunities.
* For those considering moving to another area with a lower cost of living, much depends on if you can sell your home for the amount of money you need to make the move worthwhile. If not, it will probably make sense to wait until the housing market turns around.
* An obvious strategy is to cut unnecessary expenses from your budget. While many are living paycheck to paycheck, others have room in their budget to scale back discretionary spending each month. Cutting back on just a few monthly expenses each month will, in just a few years, result in significant savings if you invest that money wisely.
* It’s important to become informed about all possible tax benefits. More than one in three Americans with access to a tax-protected account such as a 401(k) do not participate. Also, many who do have 401(k)s have not transferred them from former employer’s accounts. Financial experts recommend consolidating all accounts so the funds are easier to monitor.
* Regarding your investments, diversification is key, and an expert will help you decide what percentage of your assets should be separated into what kind of markets.
Don’t forget to ask a life insurance representative to review your coverage. It’s critical to have adequate life insurance protection in place to safeguard your family against the unexpected. You can call the life insurance representatives at SBLI (sbli.com) at (888) GET-SBLI (888-438-7254) to request a free coverage review. They will be happy to review your current needs and assess those needs against your current coverage.