Setting the right retirement budget is a big challenge for many baby boomers. If we consider the rising costs of long are term care services as well as increasing cost of living, and then match it with the lackluster income growth, then we get to see just how grim the future can be for these retirees and the generations after. It seems as if the images we painted of how our retirement will be is slowly becoming a pipe dream.
However, we can turn things around. All hope is not lost, and we can still achieve our retirement goals. We just have to be more proactive about planning and be aware of the decisions that directly affect our retirement.
If you are one of the baby boomers facing these challenges and fears, here are seven retirement budget tips that will help you in reaching those goals:
One of the biggest fears that the older generation have is outliving their money. This makes investing a substantially intimidating task to pull off. In our previous post entitled, 3 Simple Retirement Investment Strategies, we listed the different approaches in which you can accomplish this step successfully.
Long term care insurance coverage helps older adults pay for the substantial rates of care services in the country. As you many know by now, long term care in the country is reaching unaffordable heights. While the rich can rely on their assets to pay for the care and the low-income individuals have Medicaid, the middle-class Americans are practically left to fend for themselves when paying for care.
This makes finding coverage as early as you can vital. Moreover, policies purchased early often have lower premiums, so it frees up substantial amounts of money for policyholders. You can start by requesting a quote from the Association for Long Term Care Planning or ALTCP.org.
Studies show that the average household debt is $134,643. If you have not addressed this issue fully, then you should take the necessary steps to reduce the amount of debt you carry around. Make at least the minimum monthly payments on time each month.
Moreover, take caution not to acquire new debt. Be wary of your expenses, and avoid commercials and solicitations encouraging retirees to take on new debt.
Yes, a big portion of retirement planning involves saving money and maximizing returns on investments. However, we would also like to point out another simpler way of ensuring income: part-time jobs.
Working post-retirement may not have been part of the original plan, but many seniors are enjoying this new challenge. Keeping a part-time job provides decent pay for flexible hours. This means that you get to keep your minds engaged and still enjoy the downtime you looked forward to during retirement.
There are various ways in which you can scale back on your expenses. For example, if you are living in a space good for a big family when it is just you and your spouse, then consider moving to a smaller place. This will help you lessen the costs of maintaining a home. Moreover, you can remove unnecessary memberships from your monthly expenses.
Saving and budgeting for retirement do not mean that you should forget about having fun. You can still travel and buy the things that make you happy. What matters is that you plan these expenses thoroughly. Stay away from any situation that may incite impulsive spending.
Track all your expenses and income. This way, you can see how you can adjust to make room for a bit of leisure and travel.
Many baby boomers are in a compromising position now because they are a part of the sandwich generation or the people helping their children financially while providing care for their elderly loved ones. As noble as this may be, taking on a responsibility this big can hurt your financial health. Keep in mind that it is okay to say no. After all, you should prioritize your well-being, as well.