The golden years of life after retirement are meant to be happy, relaxing years—a long reward after many years of hard work and saving. This is the time that most people look forward to spending time enjoying life. This will not be the case for many, however. A large number of older Americans run into stress during their golden years because of unexpected financial issues. Here are some ways that you can alleviate some of the stress:
Focus On Cash Flow
When you’ve quit working, having cash coming in independent of work is a necessity. This cash flow can come from a number of places. It could be a 401k or an IRA. It could also come from a traditional pension or from Social Security. Finally, you could get cash rolling your way from bond interest or stock dividends. Regardless of where your cash flow comes from, it’s a necessity to have it coming in. If it exceeds your expenses on a regular basis, your stress level should stay pretty low.
Pay Off Debt
Debt can be a source of stress at just about any stage of life. If you’ve got a large amount of debt with insufficient cash flow to pay for your lifestyle, you’ll undoubtedly have additional stress. The way to alleviate this stress would be to pay off debt. Every dollar that you can cut off of your minimum payments, including on your mortgage, is a dollar that’s available for another purpose. Interest adds up, sometimes to the point that it makes up one of your largest bills, and it can really limit your ability to make ends meet.
Seek to Live in Something Affordable
Additionally, to offset costs of retirement, you might look into moving somewhere friendlier for retirees as living in a city with a high-cost of living can be difficult. Try looking somewhere where you are close to family, but still don’t have to pay higher amounts in food or rent. If you are not planning to live by yourself, look to cities that have great senior living facilities and a great senior community.
Avoid Overdrawing Your Retirement Accounts
There might be a temptation to draw more than the recommended amount from your retirement account. Whether you’re looking for a boat or an RV, if you cannot afford it with sensible withdrawals, you cannot afford it at all. The same goes for basic living expenses. For example, if you choose to move to an assisted living community, keep in mind that assisted living costs range widely. For example, the cost of assisted living in Georgia is between $1700-$3500/month. Shop around and pick what works best for your budget. When you take out more than what’s prudent from your retirement accounts, you limit the amount of money that you’ll have in the future.
Check Out Reverse Mortgages
If you’ve been serious about paying off your mortgage, you’ve undoubtedly built up some equity over time. It’s possible to access this equity through a reverse mortgage. According to Trinity Mortgage, reverse mortgages work by tapping into the equity homeowners have already built in their homes by unlocking this equity as income. Different types of loans and mortgage rates determine how the homeowner receives income from the reverse mortgage. You get the cash and retain the ability to stay in the house until you die. The bank then gets the property if your heirs decide not to pay back the equity loan. Reverse mortgages aren’t for everyone, but they can provide some stress relief for those in need of some cash.
These are just a few ways that your stress can be lower during your retirement years. Making a few tweaks on the front end can make life easier as you age. The earlier you prepare the better, but it’s never too late to get started.
We hope you’ve enjoyed these tips about happy and smart decisions for retirement planning. Following them will help you and your spouse enjoy the later years of life, without having to worry about going back to work.
