Many people look forward to retirement but are not taking action while they’re still employed. Some find themselves in a quandary when they’re already starting their retirement years and then panic finding ways to invest properly or when they’re about to get short of funds, find other financial resources to help them in their needs.
Experts have seen that many baby boomers who are more educated and financially capable than their parents still get confused as to how to invest their funds. They’re quite confident that with the lump sum they receive from their 401 contributions, they will not run out of money moving forward. As a result, some make unwise investments and misspend their savings on various expenses.
According to the experts, retirees are not getting the right information on managing their funds or they’re just not doing enough research to help them in this aspect. Some unfortunately fall victims to financial advisers who are out to take advantage of senior citizens not well knowledgeable about financial management.
Maintain savings account
A very important step towards ensuring financial security is to determine the options available when it comes to saving money. Your first stop should be your bank. Maintain your savings account if you already have one and then consult with your bank about retirement savings services they offer both online and offline. They normally have the IRAs and other investment options available.
Talk to a financial adviser
Your bank can also recommend a reliable financial advisor to help you with investments. Your goal for investing money is to earn extra income and not be duped by an unscrupulous person taking advantage of seniors who may know nothing about the right ways of saving their funds. Just be sure that you clearly state your goals and you don’t put a huge amount of your savings into investment products. Beware of scams and faulty advice as well and don’t easily be tempted into buying products that promise a huge return on investment in such a short time. NASAA data from 2005-2006 showed that 44 percent of investor complaints came from people aged 50 and older.
Change your lifestyle
Another effective way to save money is to change your lifestyle. If you’re used to a luxurious life and using expensive items in the past, it won’t hurt if you spend less on cheaper items and maybe use a less expensive car. It is also wise to move into a smaller house if your kids are no longer living with you. It may not be easy to do this but moving on, you will find that you’ll enjoy your retirement savings longer.
You can start with your lifestyle change by making a list of your monthly expenses. From here, you can then decide in which area you can cut your expenses. If dining out has been your habit, it might be a good idea to start eating at home on a regular basis and dine out only twice a month. For those who have accumulated numerous clothes, accessories and household items, you may want to hold a garage sale so you can profit a little from your personal belongings.
Photo via fidelity.com
About the guest author:
Johnson is a financial consultant with years of experience helping retirees save and manage their funds. He recommends the Senior Citizens Finance Guide for retirees needing information on financial management.