We all have visions of spending our golden years enjoying our freedom; doing things we want to do and having the time to do them but can you really afford to retire? It seems that more and more people that I come across that are close to retirement age, or that have already retired are becoming increasingly concerned about their finances. So many people today are wondering if they will outlive their finances. With healthier lifestyles and the advancements in medicine many people could live longer in their retirement years than they may have spent in the workforce.
About ten years ago more workers were talking about retiring in their 50s and for many their aim was to retire at 55. Then things changed drastically and a large number had to rethink their retirement goals. Some of those that had already retired found themselves looking for work again. Most of us know that once you are over 50 years of age finding work becomes more challenging, so many of those took jobs that were at minimum wage and way below what they are qualified to do.
Now, even the thought of retiring at age 65 has become just a dream for many, because they just can’t afford to give up their jobs. I am hearing more say that they will have to continue to work until they are age 70 or longer if their health holds out. A number have even admitted that they can’t afford to live to be old.One friend that was living off the interest of her investments for a while about 10 years ago has since lost those investments. Fortunately, she did manage to find work and is making a living while in her late 50s but she like millions of others has genuine concerns about her future and the fact that trying to live on less than $1000 a month when rent or mortgage costs alone are considerably higher than that. This is a huge concern for millions of seniors today. Is it any wonder that so many are searching for other countries to live in where they can actually afford to live on their small fixed income?
With the volatile markets in recent years those that have invested for their retirement cannot be sure of what they will have available to them when they need it. Many do not have investments and have to rely on a pension and if they are fortunate a little bit of savings. Others are trying to manage on a pension alone. Many seniors are in a predicament that is not due to the fact that they have been irresponsible. It’s most often due to circumstances. Life changes in the most unexpected ways at times and can change everything that you planned for. Divorce and dividing assets is a big one, as well as unexpected health issues and job loss.
Many people try to pay off their mortgage and other debts before they retire. There are a large number of couples that waited until they were established in their careers or for other reasons that have not had children until they were in their 40s. This leaves many couples in their 50s that still have children at home and are still paying for their education. Having a mortgage, education fees, a family to take care of and other daily expenses can make it very difficult to save and invest for retirement.
Things that were once luxuries to our grandparents; that over the years have become more like necessities to us need to be reassessed once more. Are they really a necessity or a luxury?
What could you give up if you had to?
• Cable or satellite TV
• The internet
• Cell phone (or I-phone)
• Your car ( basic transport or luxury car)
• Getting your hair done.
• Buying gifts
• Going out to eat
• The gym
• Moving to a less expensive or smaller home
• Air conditioning
I’m sure that you can think of more but in all honesty what could you do if you had to?
There is a difference between having a basic car for independence and convenience and having a luxury car that does the same job but with more comfort. There is a difference in buying designer label clothes and still dressing nicely in non designer clothing -the saving can be significant.
There is a difference in having a basic cell phone for emergencies and having an expensive phone with all the bells and whistles that also run up high phone bills each month.
Having a large family home that takes a lot of upkeep and high utility bills for one or two people when you could downsize pay off the mortgage; possibly have some money left over and cut your monthly costs. Sometimes moving to another area could bring the costs down too.
There are certain things that are really important to our physical and mental health, eating healthy foods, exercise and having hobbies and interests are crucial to our wellbeing. If the gym is an expense you really can’t afford there are other options like walking, dancing, using weights at home, riding a bike etc.
None of us want to give up what we feel we deserve and enjoy but sometimes you got to do what you need to do, so if your finances are a concern to you start prioritizing what your real needs are.