How to Make the Most of Your Money in Retirement by Wanting What You Have
Retirement can usher in a variety of mixed emotions with our financial stability being at the top of our list of concerns. Who can we trust? How should we manage our money? How can I feel financially secure? Join in our discussion as we ask these questions and more to financial expert Pam Krueger who has some great advice for women in retirement. Enjoy the show!
Author, talk show host, and financial expert Pam Krueger understands the decisions women face as they transition from working full time into what they hope will be the golden age of retirement. Her greatest piece of advice? Focus on the things that you have. Identifying your own unique set of circumstances will help you tailor a retirement plan that best suits your needs. Here are a few examples:
Good Health, Poor Savings
Many women approach the age of retirement and find themselves still quite healthy physically but in poor health financially. While it may be very tempting to retire, it may also become very disappointing when financial obligations cannot be met.
Pam suggests taking a moment to look at what you have. Do you have the ability to continue earning an income? You do! Does that mean you have to stay in the job you’ve had for the past 30 years? Absolutely not! Retirement is very often a transition from one job or career into a less demanding position that will still supplement your income and beef up your savings.
You may need to cut back on hours or take a lower paying position, resulting in cutting back your spending or downsizing your home, but the decision is yours to make. You get to decide if living on less while working less is the right option for you or if you need to continue working full time until your savings will carry you sufficiently into the retirement life you’ve been dreaming of.
House Rich, Cash Poor
If you find yourself nearing retirement with your house completely (or mostly) paid off yet you’re lacking the savings you’d hoped to acquire, you still have options. Once again, you need to identify your individual set of circumstances regardless of what your friends or neighbors are doing.
Are you emotionally attached to your home and planning to never leave it? If so, a reverse mortgage is an option that you can consider, though it comes at a cost. Essentially, a reverse mortgage allows you to stay in your home for the rest of your life while the institution pays you every month. Your cash flow will continue and you will always have a place to live, but your heirs will not inherit the equity that you’ve put into your home over the years.
The problem that many women face is that they believe themselves to be powerless over their circumstances and they forget that they are in control of their own money. They listen to their friends and family and believe they have no options other than the recommendations that have been made to them.
Being proactive and researching your options before you reach retirement is the best thing you can do for yourself and your future. Your hard-earned money is yours to manage and with a little help from the right kind of experts, you can make an educated and informed decision.
Adequate Savings, Undisciplined Spending
Let’s face it, many people are just not sure that they can trust themselves to budget wisely and spend only what they have allotted. In this case, buying an annuity is an option they might consider although it does come with a great cost.
An annuity is not an investment plan. It is a contract with an insurance company. When an annuity is purchased, the owner hands over their savings for the insurance company to manage and in return they can expect a steady stream of payments to come in 20 years down the line.
Unfortunately, owners of annuities lose a significant portion of their savings along the way to commissions and yearly fees. Just like reverse mortgages, annuities should only be used under a very specific set of circumstances and under the advisement of a fiduciary financial advisor.
Finding a Fiduciary Financial Advisor
A financial advisor and a fiduciary advisor are two very different individuals. A financial advisor is usually paid to sell you products such as investment plans, annuities, or reverse mortgages. They may offer up several options to help you, but at the end of the day they are most concerned with the commissions they will earn from what they’ve sold you.
A fiduciary financial advisor is one who is required by law to put your financial interest first. Yes, you will be paying them for their services, but you will have the added security of knowing that this advisor is fighting for you and your best interests.
Pam’s company offers a unique online tool that matches customers with the fiduciary financial advisors that can best serve the customers unique set of circumstances and needs. These fiduciary advisors can help you identify and focus on what you have so that you can make the best decisions for your finances.
The most important thing is to remember that you have the power and the ability to make responsible, informed, and educated decisions about your money. You have the option to partner with a trusted fiduciary advisor to ensure your decisions are sound and you are in control of your finances.
Have you ever felt that you had no control over your financial security? Would you rather work more years with greater savings or work fewer years while living on a smaller budget? What steps are you going to take to make sure you have control over your finances? Please share your thoughts with us!