December 28, 2018
Retirement Strategies and Retirement Advice
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As we boomers get closer to retirement we begin to think about our retirement strategies and the retirement advice we have been given. How has it worked out for us and what possible improvements or changes should we make at this late stage of the game.
An amazing 24 percent of boomers admit that they have no retirement plan whatsoever and 53 percent of boomers have no confidence in their retirement savings and plans. So what does all that add up to?
First, many of us are planning on working for a longer period of time. This only makes sense as the lifespan of a US citizen has increased over the past twenty years, and the age for eligibility for social security has increased. In the past people looked to get out of the rat race as soon as possible, and I know that a good friend of mine’s father retired at 62 and started collecting his social security checks. For him it was a wise choice because he died at 67. Imagine working a lifetime and retiring at 65 and then only getting two years retirement.
This leads to the question we cannot answer. How long do any of us really have? Because of that question perhaps we should be looking at how we can both relax and enjoy our retirement and still work and/or have a steady income. This is the retirement strategy we would all like to take. So how can you make that happen?
It has to be a two-fold retirement strategy. First, to reduce our debt and the level of our subsistence cost, and second, to get income from some work that we enjoy doing.
Reducing debt is something everyone, at every age, should be thinking about. The average American is carrying between $10-20,000 dollars worth of credit card debt. (Different sources calculate that differently, so we’ll work with that range.) This means that even conservatively speaking we are paying a thousand dollars a year in interest alone! Over a lifetime if you would invest a thousand dollars a year and get a 5% return you wouldn’t be concerned about the cost of retirement.
But for some reason Americans choose to pay the interest and later pay the cost. So get rid of that debt. Choose to live more simply and apply the cost differences to your cards to get rid of them. Don’t think of them as credit cards; think of them as debt cards. It’s more accurate that way. Get out of that hole.
The second part of reducing costs is to think about your home and the cost of living in your area. Do you need 2,000 square feet, or could you manage on 1500? The slight reduction in house size also impacts all your associated costs such as utilities. Maybe you can relocate to a smaller home closer to where you want to retire or to an area that has a lower cost of living.
Now on to income and retirement. Work is work because most people aren’t doing something they enjoy. For a late life shift think about working at something that engages your passion. Once you’ve reduced your cost of living and dropped your debt you don’t have to worry so much about the salary level or the hourly rate. Reaching retirement should mean not worrying about stuff and just enjoying life.
Do you enjoy golf? Maybe working part time as a greens keeper at the course will bring you pleasure. Do you love children? Maybe becoming a surrogate grandparent at a day care center might be just the ticket for you. This isn’t the sort of retirement advice you are probably used to hearing, but it might be the right retirement strategy for you.
Life is about discovering and exploring your passions. Retirement doesn’t mean what it used to. Boomers aren’t buying up rocking chairs they are buying rocking guitars. Life doesn’t have to slowly grind to a halt. With the right outlook your golden years can truly be the best time of your life. All it takes is a retirement strategy and following the right retirement advice.
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