What will your last day of work look or feel like? Imagine walking out the door for the very last time. Will you parade through the office waving and smiling? Maybe you will cry when they hand you a bouquet of flowers and gift card to your favorite restaurant. I’m sure you expect it to be a wonderfully, exciting day. It most likely will. As you imagine your retirement day, are you also imagining life after retirement?
Do you have a plan to maintain your lifestyle and live comfortably?
In a previous blog post, I talked about the $1 million fantasy. Financial gurus suggest that $1 million is the magic amount that is amount needed to support life after retirement. I have also seen articles questioning whether $1 million is enough. For many social workers and service professionals, having $1 million in retirement savings is like fixing all the world’s problems. The desire is there, but we’re losing the battle.
When my parents talked about retirement, they expected to work for the same company for 30 years. My dad was a laborer who worked in a manufacturing plant. At some point, companies incentivized retirement. The offered to maintain benefits for employees who were 55 years old and had worked for the company for 30 years. I watched my dad and his friends retire all saying they didn’t want to lose what they had worked for all of those years.
They expected the company pension, savings plans, and small investments to support them for the rest of their lives. Times have changed. We live longer and are advised to work longer.
In the article 60 Years Old with Zero Retirement Savings on DaveRamsey.com, there are four recommendations that make excellent sense. Dave and I totally agree on the fourth recommendation.
Pay off the Debt:
I like to watch HGTV shows where people look for second or retirement homes in exotic places. The idea of living on an island in the Caribbean is sexy. Many of the home buyers are young, successful and financially well off. A few are older and want a place their children and grandchildren can visit. The homes are beautiful. Is buying another home at a later age wise?
A home mortgage is probably the largest debt that most people must pay. In addition to the mortgage, a homeowner is responsible for property taxes and homeowner’s insurance. These two additions could double the monthly amount a homeowner pays to own their home. Maintenance costs also add to the total cost of sustaining a home.
Other debts that need to be paid off include medical expenses and credit card accounts.
Keep Working:
We are in total agreement on this item. I thought about the professionals who continue to work well into their 80s. Doctors, lawyers, psychotherapists all work well into later life. They enjoy their work. They have also gained greater wisdom and experience because of longevity.
Dave Ramsey suggests working longer and contribute to retirement accounts. He mentions ‘catch up savings provisions’ that allow an increased annual contribution to 401 (k) plans. He also mentions contributions to other retirement plans.
A part-time gig or side hustle allows social workers and others to earn additional money that can be used to boost their retirement income while supplementing their current household budget. Talking to a financial planner or retirement expert can guide you regarding what you need in order to retire comfortably.
Social Security:
Most financial planners recommend delaying social security until age 70. Social security is an entitlement that will likely go away. Anyone, who is not of the baby boomer generation should develop a plan to save and invest their money wisely.
Baby boomers who have little to no savings can still save and invest for the future. Begin an incremental savings plan. Use the savings to pay off debt or invest it. Also cut unnecessary expenses. This brings us to the fourth recommendation.
Make Wise Choices:
Begin to look seriously at your current and preferred future situation. Develop a plan to cut out the fat and create a path toward retirement stability. Talk to an expert who can provide sound advice and recommendations. Start now.
I started building the foundation for my sustainable, successful and satisfying side hustle by asking and answering 5 Smart Questions.
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Boost Your Social Work Income with 5 Smart Questions.
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