Solve Financial Problems Instantly
While the recession was certainly a shock, life in the 21st Century should be better than it has ever been. Many things that people regarded as luxuries a couple of decades ago are now common place. The Internet has added to life benefits and everyone now has access to entertainment avenues that were once denied. Beneath the surface however there are many problems and merely looking at those in middle age and beyond highlights the difficulties than many are facing in the years to come.
Life expectancy is increasing. Those who retire as normal in their mid-60s should reasonably expect to live another 20 years if the recent report from the National Center for Health Statistics is to be believed. It is an increase of 6 years or so over the mid-1900s. That's great news but it does put extra pressure on retirement funding, both individual saving and national provisions. A recent report by Sun America revealed that 70% want to continue to do some sort of work during retirement. In many cases retired people have no choice because they haven't got the funds to finance their retirement otherwise.
A great number of retired people in the USA are struggling and there are few signs that the next generation will be any better off. Recent retirees should be fairly active yet too many seem to be spending too much time in front of the television according to U.S. News & World Report.
There is no finite amount that people need to save for retirement. So much depends on personal circumstances, maintain their current lifestyle and of course health. Medical bills can be very costly and while some will avoid them completely others will not be so lucky. There are people who want to continue to work just because they enjoy the environment and cannot imagine getting up in the morning with nothing to do.
Company guaranteed pension plans have increasingly disappeared and the recession hit many 401(k)s because there was simply little growth possible. Those people who had planned to build up their assets by investing in real estate were hit as well. Long term owners usually had significant equity so at the end of the recession there was still an asset but the whole real estate market spent years in turmoil. In some cases people owed more on their real estate than they could reasonably expect by selling, even if there was a buyer out there.
Lifetime Real Estate Mistakes
The common mistakes that people have made in trying to secure a comfortable retirement by purchasing real estate include:
- Buying a house you cannot really afford. If your budget is stretched in order to make the mortgage payments each month there may be little left over for other savings towards retirement. It is easy to take the view that your pay check will increase over the years but it is not something to rely on; the repayments may not get any easier.
- If you have compromised your provision for retirement to save for your down payment, you are losing the growth that compound interest guarantees. Certainly taking any money out of a 401(k) does not make sense.
- You can pay off your mortgage early though that does not necessarily make sense. If you are approaching retirement then you certainly don't want a mortgage payment to pay when you no longer have a regular monthly pay check. As a strategy if you are younger you are better advised to increase savings into the 401(k) than increase your mortgage payments to seek early repayment.
- An emergency fund is a major boost to everyone, whatever age, but it should not be taken from the equity in real estate unless an absolute last resort.
- Not picking a good time to sell. There is no absolute science involved in the best time to sell to realize your asset. If your comfortable retirement is dependent on selling up, downsizing or renting, you need to plan a sale well before your intended retirement date which may be any time from the age of 62 onwards.
Make It a Happy Retirement
Retirement, certainly a comfortable retirement, is dependent on savings in whatever form. It is not simply a matter of money otherwise some rich people may retire in early middle age. It is a matter of finding a balance. Retirement should be satisfying. Older people have a wealth of experience that they can put to good use without their continuing to work for a regular pay check. The challenge is to reach the point whereby later years are as satisfying as they should be. As a matter of urgency, everyone should sit down and think where they stand at present and where they hope to be on reaching retirement age. There are certainly too many carrying debts that are eating away at their regular income, even on something like expensive credit card debt. Paying such interest is a complete waste of resources. If there is a single action to take immediately it would be to take out an expenses & payday guaranteed approval to pay off such balances. It is a simple step that is available to most people who have a regular income. The money you will save can be put aside towards retirement even before you start to look at other economies to create a surplus to put away for the future as well.Read more Comments