Are Your Retirement Plans Off Track?
Lots of us are worried about retirement. Most of us did have retirement plans. We did save for retirement. But we found that those plans and savings goals did not work out the way we, or our financial experts, told us they would work out. Some issues were beyond our control. The recession multiplied many problems too.
We lost money that will be tough to get back. Most people saw investment accounts lose value as stock prices declined. So our savings shrunk. Even if we saved money in bank savings accounts or certificates of deposits, the interest rates dropped down to almost nothing. Even if we are still sticking to our plan to put money aside for retirement, it is hard to figure out where to put it so it can grow to provide financial security in the future.
High unemployment rates hit everybody hard in a variety of ways. Workers over 55, who may be especially worried about retirement, got hit even harder. It is hard to stick to a savings plan when you do not have income. After several months of unemployment, many of these older workers were forced to dig into their retirement accounts for money to pay current bills.
Many people also counted on using home equity to help provide a nest egg for retirement. This asset could be used in a variety of ways. However, during the recession, many homes lost value. Since equity is really the difference between the home value and the loan balance, this equity shrunk as home prices declined.
There Is Still Time To Reinvent Retirement
The reality for most older workers is that retirement plans will have to change. That does not mean they have to be totally thrown out. When polled, most people over age 50 do not plan to quit working at age 65. These older workers a variety of reasons for this. Some know they just need the income. Others like to contribute and be productive. Some just enjoy their jobs so they see know reason to quite working if they are still fit and healthy.
They may want to leave their current job though. Many plan to explore a different type of job, start a home business, take contract work, or just cut hours. They figure they will change their employment at the traditional retirement age, but do not plan to quit working.
Others are coming up with some creative ways to use their home as a retirement nest egg. Some older people have large homes they purchased for a growing families. Now they use those extra bedrooms to house rent paying boarders instead of their own kids. Others plan to downsize. They want to sell their houses and move into more affordable houses or apartments.
It is important to pay off debt too. A person who can pay off credit cards, auto loans, and mortgages will not need as much income as a person who reaches retirement age with a lot of debt.
Your ideas about retirement may have to change, but there is still time to figure out what you can do to have a comfortable retirement.