It’s Never Too Late to Start Retirement Planning

The author outlines some basic strategies people can use to be financially prepared for retirement.

The baby boomers, those who were born between 1946 and 1964, are described as the “sandwich generation.” They lived prosperously, grew up in relative abundance, and even expected that their Social Security, government, and health care support would continue as they grew older.

Now that the economy of the US is up in the air, is this group of 80 million aging Americans to blame for the nation’s wobbly economy, or are they simply bearing the brunt of the debt crisis?

The answer is not so simple. Life was good for retirees until September 2008. Since then, the global economic disaster took a toll on the lives of every American, and it seems that retirees and seniors were hit the hardest.

Underscoring the global financial squeeze, 1 in 4 baby boomers still works with the harsh reality of not ever being able to retire. And not surprisingly, this is the same number as those who say that they haven’t accumulated any retirement savings.

In 2011, millions of Americans have retired and they’ve been promised that the rest of the working people will take care of them. But unfortunately, all this comes at a really bad time for a Federal government that is already flat broke and a national economy that is teetering on the threshold of a disaster.

Nothing can be worse than letting your retirement life be marred by personal debts, and avoiding this scenario calls for proper retirement planning. Remember that it’s never too late to start planning your retirement years!

Trick yourself to save more and spend less – Tips to jog your money for retirement

It is a unanimously acknowledged fact that attaining financial security in retirement doesn’t just happen. It requires incessant commitment, flawless planning, and of course, money!

Most Americans spend more time planning their vacation than their retirement, and this is the most probable reason behind the growing number of bankruptcies among seniors. Fewer than half of the American population has determined how much they need for their retirement. Effective retirement planning requires the following:

  • Rein in your credit usage: While using credit may not seem to be a way of saving for retirement, it may restrain your chances to save enough money for your post-retired life. Improper use of credit cards usually limits a person’s ability to save, and this results in a higher cost of living than what is expected for a person with good-enough credit rating.
  • Stop spending your dollars and stick to the plan: Saving is a rewarding habit, and if you’re already saving money, whether for retirement or for any other goal, keep going! If you aren’t, this is the time to get started. Start with a small amount and try increasing the amount as you get closer to your retirement age. The sooner you start saving money, the more time your money will have to appreciate in value.
  • Determine your retirement needs: Retirement is expensive. Experts are of the opinion that an individual needs at least 70% of his pre-retirement income after retirement, and the low income earners need 90% of their income to maintain their standard of living after they stop working. Take charge of your financial future so that you may secure your retirement years with effective planning.
  • Plan to relocate after retirement: Though your present home may seem to be emotionally and sentimentally dearer to you, you should consider whether or not it is the right place for you post-retirement. Almost 50% of the baby boomers plan to relocate after they retire in order to cut costs. Apart from a lower mortgage amount, relocating can also offer you some financial benefits. Move to an area with lower energy costs, a lower cost of living and with a better tax environment.
  • Lead a life within your means: Now that you’ll be living on a fixed income, you have to maintain a life that is within your means. Stop succumbing to the temptation of getting the thing that you set your eyes on. Try and fulfill all your wishes while you’re already earning so that you can lead a debt free retired life. Borrowing money to repay debt is not a strategy to adopt when you’re not working as this is nothing but a “fighting-fire-with-fire” approach towards debt reduction.
  • Don’t withdraw money from your savings account: If you’re into the habit of using your retirement fund as a piggy bank, you’re probably making a huge blunder that can cost you dearly in the long run. Save money in your retirement fund and use it only when you reach the retirement age to reap the benefits of the tax-breaks.

When you retire years from now, it’s not going to be like your parent’s retirement in which you’re rewarded with a gold watch and a guaranteed pension. Times have changed and retiring in the present financial times is more of a mystery.

Nevertheless, adopting some smart financial moves towards retirement planning can at least take out the mystery from this entire phenomenon. Trick yourself into doing what you should do and avoid leading a debt-stressed life post-retirement.

Stewart Bradley is a contributory writer associated with and has written several articles for various financial websites. Though he holds his expertise in the Debt industry and has made significant contribution through his various articles, he has interest in budgeting, mortgage, insurance, short-term loans, bankruptcy, credit advice and more.