Retirement Tips for Boomers and Their Parents
Retirement - Funding Now and Saving During
by Dr. Marion
There has been a lot of discussion about the financial crisis many of us, boomers and seniors, will face as we reach retirement age. How will we continue to fund our lifestyle, without an income? Even for seniors who think they have planned adequately, there may be surprise expenses around the corner. Here are some ways to fund retirement, as well as some ways to cut expenses.
- Social Security: You should be eligible to receive monthly payments, once you've reached the age of 62. Remember though that if you sign up right away, you won't receive your full benefits. If possible, delay signing up until you've reached the "full retirement age" (varies depending on the year you were born).
- Retirement accounts: If you saved during your working years, through 401(k)s or IRAs, you can use the money now, but you will have to pay taxes on it. Remember to take the required minimal withdrawals to avoid a tax penalty.
- Roth accounts: These have the benefit of tax-free withdrawals, because you already paid taxes on the contributions.
- Home equity: If your home is paid off, you may be able to use a loan or reverse mortgage, should you need to.
- Insurance: Make sure you sign up for Medicare on time, to avoid a rise in premiums. Look into purchasing Long Term Care insurance to avoid having to dip heavily into your savings for unforeseeable health needs.
Ways to save:
- Downsize your home: If it makes sense for you, consider moving into a smaller place, like an apartment or condo, and use the extra money to pad your savings account.
- Sell your car: Now that you don't have to drive to work everyday, do you still need a car? Especially if you are in a 2-car household, consider selling one car, and taking advantage of public transportation whenever possible.
- Use senior discounts: While some businesses advertise their senior discounts (movie theaters, hotels, restaurants), others do not. Don't be afraid to ask!
- Travel during the off-season: Without the constraints of work, you can travel during non-peak times for a tremendous savings.
- Cook at home: After a long day of work, coming home and cooking a meal can be tiring. But now, you can devote more time to grocery shopping and cooking. This is a great way to save money.
- Seek out free (or cheap) entertainment: Chances are, you will be faced with more leisure time than ever before. Look for free concerts, free museum days, and any other options your city has to offer. If you feel the need to buy a new book or movie, shop used stores or neighborhood yard sales instead.
A version of this blog appeared on Dr. Marion’s Web Site.
Published June 6, 2011