So you made it to retirement finally. Now you just have to figure out how to afford it. Due to improvements in technology and medicine, the life expectancy rate in the United States has improved over the years, which also means that saving for long-term retirement is a vital and important part of life.1 Hopefully, you have saved enough money to cover a good long life because the last thing you want to do is run out of money during your retirement years. It’s very easy to do with all those fun and relaxing days laid out ahead of you, grandkids to spoil, and a spouse that you quite possibly want to travel with. Here are five tips to avoiding bankruptcy in retirement so you can live out your days in easy style.
Tip #1: Pay Down Your Debt Before You Retire
We placed this tip first because it’s so important. You don’t want to end up going bankrupt during your leisurely retirement years, do you? Paying down your debt before retirement may take some planning with a couple of extra years of work, but it will be so worth it to not have all that debt hanging over your head. Talk to a credit or financial analyst to figure out the best way to settle up those past debts in the fastest way possible.
Tip #2: Downsize Your Home
This is one that many people have trouble with. They have lived in that perfect family home for years, raised a few kids there, and made tons of memories there. But a large home is also a large expense and sometimes just too much financial upkeep to take care of. Consider a smaller condo, apartment, or even a traditional “starter home.” You can sell your large house to free up some cash which will set you up nicely for your retirement years.
Tip #3: Sell Off Some Of Your Collectibles Or Other Assets You Don’t Need
Extra cars in the garage? Time to clear out the clutter of your life and enjoy your retirement in minimalist ease. Getting rid of “junk” that could be valuable is a fun and lucrative thing to do. Make it fun. Have that garage sale. Sell some stuff on eBay or try listing on Craigslist. You can figure out the best price for your old records, antiques and other things you don’t really need that are just lying around by doing a quick internet search.
Tip #4: Make Sure Your Health Care Plan Is Solid
The last thing you want is for either you or your spouse to become ill, but it does happen. If you don’t have the right insurance coverage you can easily go through your hard-earned savings like crazy trying to keep up with co-pays, medications, and other hospital expenditures that aren’t covered.
Tip #5: Be Realistic About What You Can Afford as a Retiree
Now isn’t the time to pay for your granddaughters “gap year” trip to Paris. This is a time when you are probably on a fixed income drawing from your retirement fund and social security. Be realistic about what you can afford and stick to it. Trying not to bite off more than you can chew, essentially, will help you in the long run in having enough money to live on. Plus, the last thing you want in your retirement years is to get into more debt. You just hopefully paid that all down before you retired! Keep those credit cards for vital emergency situations only. Try to pay cash for the things you need. It’s just common sense to stick to a realistic budget at this point in your life.
Make sure if you still have worries about having enough socked away for retirement that you speak with a trusted financial advisor. They can also point you in the right direction with investments, budgeting, and planning for extra special trips you want to take.