3 Financial Challenges for Retirees

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The American Dream directs so many of our wishes and desires to a bright future, especially for retirees life after work. Retirement living is supposed to be easy -- filled to the brim with happy family, luxurious travel, and time to reflect. 

However, the reality is far from the dream. The current financial landscape makes it difficult for those who are older to retire easily and live a life of peace. 

If you are a retiree who’s concerned for their financial well-being, we understand -- it can be stressful and confusing. In this article, we tackles three of the main causes of financial trouble and what you can do to ease your worries. 

Discrimination in the Retiree Job Market

Ageism is, unfortunately, one of the biggest hurdles faced by retirees. According to CNBC, 56 percent of older workers experience an ‘involuntary job loss’ after the age of 50. For those that don’t have current job security, this can be a crushing reality to face. 

Overt reliance on Social Security income or a lack of savings may lead to the need to find new employment. 

If you find the job market disrupting your retirement plans, here’s what you can do:

  • Reach out to former employers -- the CNBC study shows that it is easier to regain old jobs as opposed to finding new ones. 
  • Exhaust government schemes to aid older adults in their job hunt and 
  • Look for companies with an elder outreach program. 

Mounting Debt and Home Loans

After years of helping children and grandchildren, seniors often find they have nothing left in their retirement fund. Debt from student loans is also staggeringly high. CBS News reports that seniors aged 60-69 alone owe more than $84 billion in student debt

One of the causes for such high debt rates is the phenomenon of the reverse mortgage. Although this loan allows for utilizing home equity as a resource, many retirees have difficulty paying it off. This can lead to foreclosure and other financial penalties.

A solution for this is to consider selling your home or other investment property to make money to put towards your retirement fund. This will free up expenses, increase cash flow, and allow you to retire in peace rather than attempting to find work in the difficult job market. 

Looking for a rough estimate on how much your home is worth? Calculate the amount yourself by subtracting your mortgage balance from the total net worth of your home or check out an online resource that can do the math for you.

The best way to go about selling your home is to consult with a reputed realtor. Who can  advise you on the best time to sell, possible net gains from selling, and if such option even makes sense for your unique financial situation. Bear in mind that you’ll have to account for moving expenses as part of this process, which includes packing supplies and possibly hiring movers. Search for “top movers near me,” and then narrow your search to experts who are currently offering deals. 

Interest Rates Are at an All-Time Low

A GOBankingRates survey shows that 64 percent of American retirees run the risk of retiring broke.

One of the main reasons for this statistic is that banks are running historically low-interest rates. If you saved steadily throughout your prime working years but still find yourself with not enough to retire, it might be because of the Federal Reserve’s six-year streak of low target funds.

For those younger in life, this streak has the potential to balance out. Resulting in a higher overall rate. But for seniors, this rate can indicate low returns from fixed-term investments such as savings accounts and bonds. 

Find yourself in this situation? Reach out to a financial advisor for help creating a plan. 

You’ll be able to customize your approach (low risk, high risk, or aggressive), and work out a more viable alternative to long-term saving. According to U.S. News & World Report, some benefits for those in a higher age bracket are bigger retirement account limits and no early withdrawal penalties.

Conclusion

Times are tough and government bailouts over the last few years have had a negative impact on many retirees.

If you’re still worried about your financial burdens, just remember -- you’re not alone. Debt and other financial worries are an increasingly common issue, no matter your age. 

If you have time have a plan B. Consider all the options to achieving a stress-free final few years. 

Utilize some of the strategies listed above, and implement smart saving strategies, to create a safety net for a comfortable retirement and a restful life.

Article by Tina Martin


Tags

retiree, retirement, retirement living


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