Many Americans Are Scared About Retirement, Are You?
Are you ready for retirement or are you scared about retirement? If you are scared you are not alone. Many Americans find it discouraging that they may have to stay in the workforce even if they are old enough to retire simply because they will not have enough money to quit. Being scared about retirement and how you will finance it is a natural concern. But don’t stay scared, do something about it. Take the time to get to know some key details and workarounds so that you can make a few corrections before hitting your retirement years.
Ignoring the reality that we will all hit retirement age someday would be a big financial mistake. The best way to avoid a financial crisis in retirement is to save as much money as you possible can while you are still working. If you enter retirement with enough money to last your entire retirement, why would you be ever scared about retirement?
What Do You Control?
Due to the advancement of science and medicine, it’s a fact that more Americans are living longer, some up to age 100. Sure you can eat right and exercise regularly to help extend your life and help you feel good, but you really cannot control how long you live. What you can control though is how much money you save. Since you will probably be living longer, you will need more money, right? So ask yourself if you are you saving all that you can save? Can you save a bit more? How much you save and spend are all within your control…so is how much you exercise, but this is a financial discussion.
What Do You Worry About? What Do You Plan For?
Sometimes we all worry about the wrong things. We worry about things like elections, weather reports and sports scores. Or we fret about keeping up with our neighbors and co-workers. We waste time overthinking the office politics or water cooler discussions. And then sometimes we put too much planning into the wrong things. We plan and plan for extensive vacations, which last a few weeks. Or we plan for parties and celebrations that last a few hours and all we have are the memories.
All of that is great because we need good memories, nice vacations and good times with our families and friends. But we should not forget about the biggest vacation of our life….our retirement. Your retirement could last 20 or more years. Are you worrying about that? Are you planning and saving for a 20 year block of time of your life? If not, now would be a great time to start, regardless of how young or old you are. Don’t let your retirement planning become incidental, make it a priority.
Make It Bonus Money
We all know that Social Security is low on funds and barely keeping pace with inflation. Which leads to one simple conclusion, Social Security may not be there for you. If it is, your monthly check will most likely be a very small amount. But even if there is a chance that money will be available from Social Security, do you really want to take that chance? Do you want to roll the dice on funding your retirement years? Do you really want to play games with a 20 year block of your life? Wouldn’t you be better off taking care of yourself? Why would you want to rely on something so unstable as Social Security? If you save enough money to support yourself then any money from Social Security will just be bonus money.
Costs Keep Going Up, Up, Up
Health care is not getting any cheaper. If your employer is currently paying for your health insurance you will be in shock once you have to pay for it. Keep in mind that Medicare will defray some of the costs, but not all, so be ready.You should estimate that your out-of-pocket health care cost could be about $200,000. Can you afford that? Again, your working years are the best time for you to save, save and save as much money as you possible can.
The Big One
One of the biggest financial concerns for most people who are approaching retirement is outliving their money. Will their retirement investments and savings be enough to support them throughout their entire retirement? That is a huge concern. If you run out of money once you’ve retired, do you really want to go back to work. Now if you plan on working during your retirement years, that’s different. But if your health gives out and you cannot keep working, what would you do?
Well many retirees buy annuities to avoid outliving their money. An annuity is an investment that provides a steady stream of income. If you set an annuity up the right way, that stream of income will pay out until the day you die. Annuities can be a good investment just be sure to study up on the details before buying one. A good rule of thumb to follow when investing is to know what you are buying. Do your homework before you buy any financial vehicle such as an annuity, life insurance, mutual fund or stock. You wouldn’t buy a car without checking under the hood, right? Take that same approach with investments.
Do Yourself A Favor
Entering retirement debt free is the best retirement gift you can give yourself. When you hit retirement the worst financial move you can make is to be in debt overload. So before retiring, work very hard at paying off your mortgage, credit card debts, car loans and any other debts or loans you may have. Even if you have to work a bit longer to pay off those debts, do it, you will be so glad you did.
Just Do It
Sometimes fear can be motivating, sometimes not. If you are scared about retirement and how to make it financially, remove the fear by taking the time to plan, save and prepare. No one cares about your retirement as much as you do. Put the focus where it needs to be…paying down your debts, saving a little bit more and buying investments that will aid your financial direction. You get 40 working years to save enough money to last 20 or more retirement years, be sure to use that time wisely.