For most senior citizens starting retirement, one of their primary concerns is whether they will outlive their assets and income. Even with what appears to be an adequate nest egg, most retiree’s concerns are legitimate considering all the variables that go into planning their retirement.
Surveys show that the average retiree expects to live at least 10 years into retirement, but most retirees are living much longer – into their late 80s and 90s – meaning at least 20 to 25 years of retirement.
Here are some important retirement financing options seniors must consider prior to retirement:
1. What age to stop or slow down working.
2. What age to start taking Social Security. Remember, the longer you wait, the more you'll receive each year.
3. How to structure your nest egg to maximize your financial goals.
After retirement, seniors must shift their attention to managing their retirement income. One option concerns your home. For many retirees, one of their largest assets is their home, which by retirement age (usually) has been paid for.
Depending on the location and value of the homestead, retirees can consider such options as a reverse mortgage. Other options could include lifetime income annuities or other forms of investments. Each come with their own terms and may not be right for everyone though.
Another homestead option — for the seniors owning larger homes — is to sell their large home and buy a smaller retirement home. Most seniors will find that their space needs during retirement are less than they have been accustomed to, during the prime of their lives.
A second option for managing your retirement income is adapting your spending to retirement life. During retirement, it’s too easy to outspend your income because you have more time to shop, more time for leisure activities, and more time to travel and visit your family and friends.
However, retirement is usually a balance between enjoying your later years and spending less to preserve your retirement assets. Some of the many ways retirees can stretch retirement income include:
Quit using credit cards. This not only makes you more aware of your spending, but also avoids the unnecessary interest costs.
Balance your spending. If you overspend in an area, reduce spending in other areas to keep overall spending at budgeted levels.
Buy right. During retirement, you have more time to shop. Use that time to shop more wisely and spend less rather than using the time to spend more of your limited dollars.
Managing retirement income can be daunting task. If in doubt, it is almost always helpful to seek the assistance of a professional to assure your dollars last as long as you do.