10 Retirement Problems Here to Stay!
We know the cost of living is going up all the time. The cost of fuel, food and utilities keep rising often far higher than the rate of Inflation. Will we have enough Money in retirement? Will our Money last long enough? Will we be able to enjoy the same standard of living as we have now or will we have to downsize and live near the poverty line on a pension?
All valid questions so many are asking. What is the answer? You either Spend less or Earn more.
Here are 10 issues every person must solve if their Retirement is to be pain free.
1. Social Security is broken. The rules keep changing and being cut back on all who can qualify for the pension. The pension age has recently been increased to reduce the government spending. Current projections mean people will need to be 70 by 2035 before they can get a pension. Those people under 50 now will be waiting or working far longer to get any money from their funds. Will they still have a job and can they save any money? Will the tax rules still be the same or will they have to start taking charge of their own funds.
2. Unprepared for Retirement. All the baby Boomers who turn 65 at present will be unprepared for retirement. They are hoping for eternal youth but are they prepared for retirement? Most haven’t saved enough money. Have they done a good job of investing the meager retirement funds they have scraped together? Do they know how much it will cost them to live in retirement? You might complain about what is going on and the rules changing but have you really planned for retirement and all the possible things that can go wrong or change?
3. Budget Running Dry. The Federal Governments budget keeps running dry. Deficits threaten our way of life. Everyone is waiting for the economy to get better. The government keeps finding it harder and harder to balance the budget and has to get the money from somewhere. The Income from resources boom has taken a big hit so the government has lost a lot of Income revenue. What is happening is the rules keep changing as the Government cuts down on the benefits they give people. They have to work out where they can rake in more money so they can cover their expenditure. For many retirees, these deficits will mean lower growth and a reduced quality of life for the rest of their lives.
4. Don’t Understand Investments. Most Retirees don’t understand finances and investments. Many studies show how unprepared we all are for Retirement. Do you know how much you will need for Retirement and how long that will last for? What if you live to be 100 even without any Health challenges, will you be able to pay all the bills?
Most people have never been taught how to budget properly, how to use compound interest for their benefit and they don’t understand what all the fees are doing to their savings.
5. Inflation Erodes Savings Away. Are you ready for what inflation will do to your nest egg? We have been seeing inflation around every corner for so many years that we’ve just about run out of corners. Even though inflation and interest rates have been at record lows, will this continue to stay like that by the time you retire? What are low interest rates doing for current Retirees and their Investments? If the economy does improve, which we all hope it will, then inflation will become another problem to deal with. Retirees must plan for inflation. This means that your buying power will go down again. It means the real return on any investment, after these inflationary factors are considered, may decline.
6. When to Take Pension? When should I begin taking the Pension? This is the top financial issue that confronts nearly everyone approaching retirement. The key thing is to take your interest payment and not your capital so that you keep the Investment working over and over again. If the Income is very low and you can’t survive then your Investment and Super will not last very long and you will have to go on the pension, if it is still there.
The key thing is to postpone the pension as long as you can. Living on one quarter of your lifestyle is not fun. Wherever possible find ways to get extra Income so you keep your capital intact.
7. How Long Will Money last? Retirees are worried about outliving their money. Just when we should be happy about all the gains in longevity and enjoying a relaxing life, most have become worried sick by fears that they won’t have enough money if they survive to old age. Most people in there working life won’t be able to solve this problem. Simply Superannuation put aside by our employer is not enough. Living longer and still having one quarter of our life ahead of us without any Income is a horrible thought. The key thing is to find ways to get our Money working for us or generating extra Income in some way.
8. Fees Cripple Your Account. Look carefully at your retirement account and how much of your fund is going in fees. It can be very hard to determine how much you actually pay to any company that manages your retirement funds. Because these fees are charged year in and year out, they can have a big impact on your long-term investment returns. Check your Annual Statement and Prospectus. It might we worth switching and paying the early account closing fee. Remember the Interest rate is where the compounding money is made or lost, not the one time fees.
9. Interest rates Hurt Retirees. Low interest rates are hurting many Retiree incomes at present. Who’d have thought interest rates would have been so low for so long? Welcome to low interest rates, the savior of economic recovery (maybe) and the scourge of every fixed-income senior. While governments play their games and you have no control, then you have to control something.
What is sitting in your accounts is out of your control, but getting more money is not.
10. Health System Crisis. Our Health and Medicare system is taking its toll on the savings and resources of so many elderly people. Access to care will become harder to find as the nation’s Health care and growing doctor shortage falls apart with aging baby boomers looking for more care as they get older. Healthcare costs are going through the roof at present. Public health is being restricted more and more to only those who can afford it with many people reaching into their pockets to cover more and more procedures. We can’t rely on a failing system to be there when we need it. We need to plan now how we can pay for all our health costs we may incur including pre-paying our funeral costs now.
Simply most people are not coping and most won’t in the future. So what is the Answer?
There only is one Answer and that is to Earn more. Earning more needs to have leverage so the effort gets easier the older you get. Leveraged Investments require large amounts of money now so the only alternative is Business or more importantly Home Business.
With Home Business you can get started for a low Investment, get leverage and set up things on auto pilot and it will serve you for the rest of your life, growing month by month.