Retirement should be a special time. You’ve been working most of your life and now the time you have been giving to your boss and your company is your own to do whatever you want when you want.
However, many Boomers who find themselves suddenly entering or even well into retirement age, are finding they just didn’t save enough money to live the lifestyle to which they became accustomed to during their working years. When that happens, you have two choices. You can either go back to work, or you must find ways to supplement your savings and investments.
One solid way to increase your bottom line is to apply for a reverse mortgage. Says All Reverse Mortgage, there are pros and cons to this variety of loan for which you are eligible if you’ve own our owned home for many years and you are at least 62 years of age. If you qualify you could possibly receive hundreds of thousands of dollars’ worth of equity you’ve saved up by paying on your monthly mortgage for decades.
You can take the proceeds in one lump sum payment or equal monthly disbursements. You also don’t need to pay the loan back until you either leave the house or you die. But that’s where the cons come in. If you take out a reverse mortgage, you are stuck in your family home for the rest of your life. Or, if you decide to move, you need to pay the loan back before you move to a new home or even a new state.
Or, if you do decide to stay in your home until you die, it will be up to your children to pay the loan back. This is something they need to be aware of before you apply for a reverse mortgage loan.
There are other important stages and realities of retirement you should be aware of prior to quitting your day job. According to a report by Yahoo Finance, there are people who first start thinking about retirement as soon as they begin work at their first full-time job. In a word, it’s never too early to start planning for your retirement. That said, there are some crucial stages of retirement you should be aware of prior to quitting your job.
Here are just a few of them.
Pre-Retirement Years
The pre-retirement years are said to generally begin 10-15 years from the date on which you plan to quit for good. However, it can begin as soon as you start investing in your future. This is when you request a consult with a certified financial planner to review all your investments, be they IRA’s, crypto accounts, stocks, bonds, or a 401(k).
If you have yet to begin investing in your retirement, you should begin now. The pre-retirement years are also when you act on all your debts, be it student loans for the kids or your credit cards. You’ll also want to start setting aside a few hundred dollars per month in a retirement account. Keep in mind, anything you save will help you supplement your social security payments which can begin as early as 62 years of age.
Early Retirement Honeymoon Phase
Says Yahoo Finance, just like a marriage which is known to come with a honeymoon period where life seems to be easy and happy, so too does retirement. When you first retire, you see your newfound freedom as if you’ve been freed from shackles and chains.
But, with all that extra time to deal with, lots of early retirees begin to overspend on travel and hobbies. Once you retire, you must stick to your budget and also be open to making adjustments along the way so you don’t run out of funds to live on.
If you’re in good or even great shape, you should maybe pick up a gig to keep some extra money coming in and to keep yourself busy and relevant.
Mid-Retirement Years
Once you’ve reached your 70s, you should be fairly set in your ways both financially speaking and emotionally. If you’re still enjoying good health and you’ve done a good job of preparing for the future, you should be able to enjoy travel and your hobbies without worrying about money.
On the other hand, if you did not have long-term financial plans in mind things could get ugly. As you physically slow down, you might have no choice but to think about paying for nursing care or even assisted living.
Late Retirement Years
Late retirement years can come at different ages for different people depending on your physical condition. This is the time when you are much less active than you were in your younger years. You might even require long-term care.
Naturally this is a difficult period of life to contemplate but it’s also the time of life when you need to have a serious discussion with your children regarding your end-of-life plans. You need to discuss all your insurances, and who will be named power of attorney along with the executor of your will.
Remember, retirement can be the best time of your life, so long as you prepare for it financially, physically, and emotionally.