Money isn’t everything.
However, it’s so far ahead of whatever is in second place, especially during retirement, that the desire of having enough money trumps just about everything else.
Most people have handfuls of friends they care about, coworkers that sometimes share experiences with them outside of the workplace, and budding family trees, all of which are deeply important to them. Without enough money to live comfortably, how can one expect to be satisfied with any of the above three things in life?
Either way, whether someone has a budding life or not, money is still important. David Giertz suggests that, unfortunately, more than half of all Americans don’t have enough money to stretch past just one year of retirement.
On the bright side, following these tips can help any person or household edging closer to retirement enlighten the financial outlook of their golden years.
Live Within Your Means
Virtually everyone is familiar with the above saying. Essentially, it means don’t spend more than what you can reasonably afford to spend. A chancellor of a university taking home $300,000 can spend much more than someone working hard labor for $30,000 each year.
You know what happens when you enter retirement? By definition, you don’t work anymore. So where does money come from? Many retirees rely on Social Security disbursements to stay afloat, rather than accumulating sizable nest eggs to fund purchases throughout their golden years.
If you don’t work anymore — definitive retirement — you don’t make any money through wages or salary. As such, you should spend less than both the above chancellor and blue-collar worker.
David Giertz suggests to upcoming retirees the importance of trusting a financial advisor to plan out how much money is needed in the future, and how much one can afford to spend each year, based on how much money they have or will earn throughout retirement.
Simply assuming you’ll have enough money to spend considerably throughout retirement is naive. The only surefire way of making sure you won’t go broke throughout retirement is to plan cash flows and expenditures out through a financial advisor’s help.
Be Aware Of Any And All Known And Unknown Liabilities
What’s a liability? In simple terms, David Giertz describes its as an obligation to pay someone or something money.
During retirement, the most common expenditures retirees have are mortgage payments, apartment or house rents, insurance – Medicare doesn’t cover everything – and general living expenses, like food, clothing, and the like.
Financial advisors calculate how much you’re required to pay to live, to whoever or whatever that may be. Liabilities also arise when calculating taxes – and that’s a sticky situation to assume on your own.
Inheritance Isn’t Simple
Most people aren’t fortunate enough to inherit anything, though some are. Assets of inheritance are often passed down from people after they pass away. However, once someone has passed away, they obviously can’t delegate assets out themselves.
Only through established legal proceedings can retirees reliably leave assets behind to their beneficiaries. David Giertz has experienced first-hand accounts of retirees who were unwilling or unable to set inheritance paperwork in stone prior to their passing away.
As such, he recommends to get with lawyers, accountants, and/or financial advisors to set beneficiary designations, living wills, directives of healthcare, and powers of attorney in place. Transferring wealth is an important topic to many retirees. Not doing anything is the best way to make sure no family members inherit anything.
What Benefits Will You Be Privileged To In Retirement?
Most American retirees haven’t saved up any significant amount of money or other assets to serve as a nest egg to live off of during retirement. Rather, many United States citizens naively believe that Medicare and Social Security can comfortably keep them afloat throughout retirement.
Thoroughly research what benefits you’re entitled to as part of Medicare. Often times, Medicare isn’t an all-inclusive form of healthcare coverage, and works best only if you have separate insurance.
Also look to Social Security and what benefits it can provide you. If you wait until full retirement age – usually 70 – to receive such disbursements, they’ll be significantly heavier. Knowledge is powerful, and, if you equip yourself with substantial knowledge, your retirement will be loads more enjoyable.