Despite confidence in retirement stability increasing slightly across the board, many Americans are falling prey to the misconception that retirement planning is a low priority. Often citing cost of living as an excuse, those without a financial plan for retirement are headed for fiscal ruination. Whether you’ve diligently planned for retirement or not, overspending can lead to a future filled with financial insecurity.
The facts on retirement spending
According to the Employee Benefit Research Institute’s 2014 Retirement Confidence Survey, nearly half of all retirees surveyed reported concerns about rising debt. Approximately 3 in 4 adults without a retirement savings account had less than $1,000 saved. Similarly, nearly 60% of retirees have less than $25,000 in savings. For those planning to live a long and fulfilling life, a lack of adequate savings puts a kink in well-laid plans. Sadly, less than 20% of retirees had more than a quarter million dollars saved.
What does this mean for you? Being outside that 20% may result in financial ruin and serious stress. Don’t let that happen – make a change now before it’s too late.
Planning for retirement (it’s not too late)
Even if you’re in retirement, there are things you can begin doing today to make your financial future more secure:
Evaluate needs and assets. The first step in responsible retirement spending is to evaluate your total assets and needs. Are you buying high-priced items, or are your financial problems stemming from recent medical expenses? Identify the major expenses contributing to your situation.
Hire a financial planner. When overspending on a fixed income, the quickest way to get back on track is to enlist the help of a financial planner. A thorough review of your financial status will enable an adviser to suggest the best course of action.
Reduce unsecured debt. With unsecured debt, each passing month leads to more interest and fees. A large part of achieving financial stability is reducing this debt so you can keep more of your hard-earned money.
Make wise investment decisions. Working with a financial advisor will help you identify and follow through with wise investment decisions. Depending on the market, financial gains will equip you to save more and achieve financial security during retirement.
Live your way
Ultimately, it’s up to you how to spend your hard-earned money. What isn’t up to you (or any of us) is how long we have to live. Overspending in retirement can lead to a crippling lack of funds for the future, and outliving your savings isn’t a pleasant way to spend your golden years. By realistically planning for retirement and spending money responsibly, you can ensure you’ll have paved the way to a more satisfying life.
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