Expected Retirement Income Sources Can be Undependable
Expected Retirement Income Sources Can be Undependable
Good retirement planning used to be an easy, 3 step process:
1. Save a big chunk of cash
2. Retire from the rat race
3. Don’t outlive your big chunk of cash
Unfortunately, the whole game has now changed. It was possible to save a big chunk of cash when we were accustomed to living on less than we earn and depositing the remainder into a retirement savings plan or 401(k) or Keogh plan, etc.
Over the past couple of decades, we have been conditioned to spend more than we earn and put the balance on credit cards and home equity loans.
This subtle but dramatic change in our mindset has resulting in several problems related to our retirement planning:
1. We typically don’t save enough to have a ‘big chunk’ at retirement time. In fact, almost 1/3 of Americans have less than $25,000 in assets by the time they are 60 years of age! That means these people think that they will be able to live on their Social Security check during their retirement years.
2. Due to this lack of a ‘Big Chunk’, we often have to delay our retirement dates.
3. When we finally do retire, we are so conditioned to living beyond our means that we are unable to shift to a ‘spend less than we make’ mentality and we will end up destitute within a few short years.
Avoiding this ‘Retirement Crunch’ requires only a few, simple changes on our mindset at the various stages of our lives.
First, while we are in the pre-retirement savings mode, we must learn to put our retirement savings first and then ‘spend less than we have left’. This is the most difficult change to make. It probably will require some sacrifice on everybody’s part and, like other significant changes, will require adoption of a whole new way of thinking and acting.
Unless we have been able to amass a ‘REALLY Big Chunk’ for retirement, we will necessarily have to develop a conservative mindset to preserve our ‘Big Chunk’ and to live within the limits of our Social Security and the income thrown off by our retirement savings. If we want to live at the same standard as in our pre-retirement, this is where we may have to look for income from other sources to supplement our retirement.
Typically, we won’t require a full time income to provide this cash flow supplement. A part time job could fill the bill or perhaps we could develop a home based business in a niche that we love and/or feel passionate about. There are so many ways to generate a thousand or two per month to help up live, travel, and enjoy our retirement years.
The sooner in life that you can adjust your mindset to consider the future, the easier this transition will be. Please give some serious consideration of your individual situation and that of your family relative to your retirement. It is particularly important to have this discussion with your spouse and family members so that everybody is pulling in the same direction – toward a comfortable and happy retirement lifestyle.
Resources:Don Seibert is a retired business executive who, as an Expert Author, writes timely articles on many issues concerning sources of retirement income. Having retired three times, he now is the host of http://www.RetireToEasyStreet.com Visit the site for a complete discussion of Retirement Income Options