Goodbye to Working Years
I have seen it happen all too often in the recent past and I don’t know if it will ever end. The older employees who have just about reached the top of their salary level begin to get weeded out and replaced by the younger employees that will do the job for about half. If at all possible, do not let this happen to you without being financially prepared for it. I did not think I would be prepared but I am surviving and you will too.
If you still have a mortgage, get that thing paid off if you possibly can or have alternative living arrangements for yourself – even a roommate would help. Hopefully, you have a 401k plan that you have been investing in or a retirement plan of some kind. Be sure to find out the best method of switching it over to an IRA or the like so that you will not be hit hard by taxes.
If you are nearing early retirement age (62), seriously consider taking advantage of your Social Security benefits. The monthly amount will be less (I think maybe 25%??), but if you multiply the amount you will receive yearly by the number of years until you could take full retirement (66 for me), you will find that it would take you many, many years at full retirement to make up for those few years of early retirement benefits. Make sense?
If you are one of those 55+ employees, it would be wise to just check in to basic health insurance. And be sure you can get coverage for pre-existing conditions. As it turns out, it is not nearly as expensive as I had feared and just knowing the facts (and adding a little for inflation) goes a long way as far as your peace of mind.
There are dozens of things you need to “just check out” for yourself before you actually retire. So do yourself a favor and check it all out now in case you find yourself sliding toward that door out of the work place. It may not be a walk in the park, but you can do it too. I have not looked back.
I want to retire, but can I?
Well, here we are. Approaching retirement and really, really nervous about it. Will we be able to deal with the everyday realities of life on a limited budget, in addition to the out of the ordinary expenses that we know will rear their ugly little heads from time to time. If we haven’t been able to plan for it thus far, then there is no time better than right now to get started.
If you are anything like me, you know financially what it will take to keep your lifestyle just the same as it is right now. You also know what areas of your daily living expenses you can cut and which ones you cannot do much about. But make that list, check it over and over and see what the bottom, bottom line is.
If you are not sure yet, contact Social Security and find out how much of your living expenses you can cover with whatever amount you will be receiving from them. If you have a pension or some other kind of retirement investment that you have set mentally aside strictly for retirement, check out what the advantages and disadvantages are of taking it out or drawing from it and how it will effect you tax-wise.
Plan to have a reasonable portion of your money in savings or money market accounts or mutual funds or the like so that you can access that money without out penalties or loosing earned interest if it should ever become necessary.
Not everyone who “retires” stops working completely. Check out alternative sources of income. Consider beginning a small part-time home business or put your skills to work for you with your art or music or woodworking or sewing or other crafts. There are a world of opportunities out there if you are resourceful.
At some point in time, and this is as good as any, it might be wise to consider the advantages of downsizing as far as your home is concerned. Perhaps selling your present home and moving into a smaller one would be a great move for you. Maybe you would consider a condo or villa or even a fifty-five plus community where the lawn maintenance and repairs are taken care of for you. I kind of like the idea of a golf cart community myself and think I should check that out.
If you retire before you can begin Medicare, you need to line yourself up right now with a health insurance program that will cover you sufficiently, including pre-existing conditions. It will not get any easier as years go by to find something suitable, nor will it get any less expensive.
Living independently as long as we possibly can is how we all want to try to retire. There are some things that cannot be changed financially for us, lottery winnings excluded. But there are little ways that we can make financial ends meet quite nicely if we can keep our options open. I for one, just cannot believe that reaching retirement age could sneak up on me so quickly! The world just must be spinning faster than it did when we were younger.
Plan for Retirement NOW
Well, if you are under forty, you may think all of this is something for you to think about in another ten or twenty years. However, if you are a WISE person under forty, you will pay attention to what I have to say.
OK. So here is the wisdom I need to share with you: IT IS NEVER TOO EARLY TO PLAN FOR RETIREMENT!!! PAY YOURSELF FIRST!!!
I can assume that many folks out there think that it will never become a problem to be able to retire comfortably. They will just pay off their home and live on their Social Security benefits. Social Security benefits alone will not get you very far and will not even keep up with inflation. Let me assure you that if you do not start planning for retirement before you are forty, it may be too late.
In my early 40s, after being a stay at home Mom of 20+ years, I found myself divorced and earning my own living. I did not benefit from the 20+ year marriage in ANY financial way whatsoever — I walked away with my children, a few kitchen utensils and some used furniture. And I know you are saying, but how does that apply to my life. Of course, your first and primary concern is to provide a roof over your head and food on the table. That is primary for all of us. But once you learn that you can do that and you work yourself up a little higher and a little higher on the income earning ladder, you will realize you must also provide for not only your present needs, but your future needs.
So here is where I come in with advice. In your work environment, as soon as you are allowed to begin investing into your retirement package — do it. With most retirement packages, you can start out with a minimum amount and then increase your investment up to a specified dollar figure or a percentage of your earnings. So do that — start out with the minimum. It is usually tax deferred dollars, so the minute you begin investing into the plan, you have made money. ANY amount of money you can afford to put into an account with pre-taxed dollars, do not blink, do not hesitate in any way whatsoever – invest it. Most often, your employer will be contributing at least a small percentage of that amount into that retirement fund also. And as that investment grows, it remains pre-taxed dollars (until you take it out).
If you do not have a retirement plan available where you work, by all means, seek out the advice of someone in the financial industry, whether it is your banker, your insurance company or an investment company. There are many other ways of using pre-taxed dollars to prepare for your retirement. No matter what type of employment you have, even if you are self-employed, find a reputable institution and begin investing in your own future.
If you are thirty-five to forty, you may still have some years that when you choose your investment categories, you may still choose to put that money into a moderate risk investment. Your return on your investment will be slightly higher with only a moderate risk of losing anything along the way. By the time you are fifty, my personal suggestion would be to move it to a more stable category. Your return will be slightly less, but your risk of losing anything will be practically nothing. Every dime you put in, even though it only makes a small return, will be there with no concern of loss. And the older you get, the fewer years you have to make up any losses you may experience in a moderate risk portfolio.
As the economic situation of our world changes, it becomes more and more important to plan to be able to take care of yourself in your retirement years than it ever has before. The pensions our grandparents received after being a loyal employee for all of those years are a thing of the past. Today, you dont even get that gold watch. If you do not make sure you will have enough to live on reasonably comfortably in those years when you can no longer work, no one else will either. Start now. Even with a small regular investment, you will be surprised how much it will grow and hopefully, you will be better prepared to enjoy those golden years.