Scared You’ll Outlive Your Savings?

Man looking into empty wallet
Created by Martha Jarrett using Bing Image Creator

Yes, retirement can be scary, particularly if you’re not rich.

Since most of us aren’t rich, and can’t live on Social Security, we could outlive our savings. Keep in mind that when Social Security was established in 1935, the average life expectancy was less than the retirement age of 65 (60 for men; 64 for women). It’s now 79 (the stats are no longer broken out by gender). With the aging of the US population, most of us have a lot of years left if we retire at 65. So, our retirement plans and savings have to go a lot further.

A few things you can do if you haven’t retired yet

You’ve got a lot more options than those of us who’ve already retired. The most obvious option is to keep working as long as you can. If you don’t want to work full-time, and it’s an option, cut back on the number of hours you work. And while you’re at it, keep saving and doing all the other things that financial planners tell you to do to get ready for retirement.

Here are a few of my suggestions:

· Pay off your mortgage

· Pay off your credit cards

· Pay off your car

· Downsize

· Move to a less expensive area

· Save more

· Contribute as much as you can to your 401(k), IRA, etc.

· Cut back on your discretionary spending (so you can save more)

If you see a pattern to these suggestions, it’s intentional. Getting ready for retirement means eliminating as much debt as you can and saving as much money as possible. If the two sound incompatible, they’re not, if you start early enough. Work on reducing debt first; then save. There are plenty of financial advisors around who will help you invest those savings. Consult with someone you trust. Since I don’t always follow my own advice, I won’t try to give you any.

What are some options if you’ve already retired?

Lots of retirement advisors out there tell you not to worry if you need more money after you retire from your full-time job. They’ll say you can always get a part-time job. Really? Have they tried? I have. I retired from the practice of law about 8 years ago and when I decided late last year that I needed a little extra money, I re-activated my law license, started applying for part-time legal jobs, and ran straight into a brick wall.

It may be illegal for employers to ask how old you are, but there are lots of other ways they can get a pretty good idea about your age. If you get as far as an interview (unlikely), all they have to do is look at you. Before you get that far, they’ll see your resume. Even if you leave off the year you graduated (advice from one job board), and don’t mention your retirement, your experience gives you away.

I don’t necessarily blame employers for not wanting to hire me (or anyone else over the age of 55). Realistically, how long can they expect us to keep working? The chances of our dropping dead from a heart attack tomorrow are a lot higher than someone in their 30s or 40s. And there is some investment of time and money when you hire someone. Maybe not as much as employers would have you believe, but it’s not nothing. So, whether or not it’s legal, ageism is real.

The other side of the coin is that there are a lot of other people out there looking for the same jobs you are. And most of them are a lot younger. When you look at a job listing and see that it’s already got over a hundred applicants, why bother? As for me, I’ve got better things to do with my time.

Life has a way of throwing you curve balls when you least expect it.

I retired a few years ago thinking I had enough money to last the rest of my life. But things didn’t go like I’d planned.

First, my husband died. He had a little life insurance so there wasn’t any immediate impact. Not financially, anyway. Grief takes its own toll. But I had to start paying all the bills and I no longer had his Social Security benefits added to mine. (For those of you that think you somehow get to keep receiving your spouse’s benefits, think again. That’s not how it works.)

Then I got sick. Again, since I was already retired, that didn’t affect my income. And because I have a Medicare Advantage Plan (an HMO), my illness was covered, except for a few minimal co-pays.

Next COVID hit and the stock market took a nose dive. What was once a pretty healthy IRA began to look a little shaky. And I began to get a little worried.

I held my breath until the market came back. But how many downturns can my IRA and I survive? The past year has been pretty rocky in that regard.

So, if you’re retired, like me, what can you do to ensure your money lasts through all of life’s ups and downs?

I could be a bit flippant and say, just spend less. But with inflation going up (and then up some more), you’ll probably just laugh. A budget would, nonetheless, not be a bad place to start. Once you know what you’re spending, and what you’re spending it on, you can look for places to cut back.

Stay healthy. And insured. Without good health insurance, an illness can take a major toll on both your body and your bank account. I’ve had good luck with Medicare HMOs, but I know people who hate them, so I won’t try to convert you. But if and when you get seriously ill, you might consider switching to one during the next enrollment period. Historically, medical care is one of the biggest expenses during retirement and HMOs are one way to avoid a lot of the expense.

Some of the things I’ve eliminated are subscriptions (everything from newspapers to streaming services) and contributions. If you’re like me and can’t conceive of not supporting your favorite candidate or your public radio station, at least think about cutting back on the amount you give each year.

I also haven’t bought much in the way of clothes in a couple of years. And while I do regret giving away some of my professional clothes now that I might need them, I haven’t missed the newest styles. Or the credit card bills that came with my shopping sprees.

Eating out is a big one for me. If you think the effects of inflation are bad at the grocery store, take a look at restaurant prices. Yikes! Eating at home can make an enormous difference, at least if you like to cook, like I do.

On the income side, consider a side hustle. If you don’t know what that is, do a little research. For us older folk, it’s really just starting your own business, usually from home and usually without much up front investment. But in today’s gig economy, it’s a lot easier (and less expensive) than it used to be.

I’ve developed a few side hustles

First, I started this website giving free information about bankruptcy. I’d like to see it generate some legal business for me, but that’ll take awhile. First, people who are having financial problems have to find my website. I’m working on that now but I hear I should consider it a marathon; not a sprint.

While I was busy working on finding legal clients, a friend asked me if I would be willing to cook her meals if she paid me? So, I’m now a personal chef! Not only is it helping me pay the bills, but I’m eating a lot better. It’s true what they say about cooking for one person. I’ve got two clients (or are they customers?) and I’m having a lot of fun. But it does take a lot of time away from other things.

I’m also doing some writing. Mostly blog posts and writing for Medium (where this article is also published). I found Medium when I was trying to find freelance writing work. As an attorney, I spent a good part of my career researching and writing (it’s not all courtroom drama), so I figure I can also write for fun and profit. I’m just getting started, but it’s coming along.

So where does that leave you?

Depending on your circumstances, you may have some of these options for how you survive your retirement years:

· Move in with your kids — I should probably list this one last because, for most people, it is the least attractive option

· If you own a home and have enough equity, consider a reverse mortgage — be sure and talk to an expert because a lot of what people say about the risks is not true

· Move somewhere to be closer to family and/or friends (may or may not have an impact on your finances)

· Downsize into a less expensive home or geographic area

· Become a nomad (I don’t recommend doing it in a van)

· Sell your house and live off the equity (you shouldn’t do this one until you’ve consulted an expert on reverse mortgages)

· Find a roommate (it’s not just for twenty-somethings)

· Assisted or quasi assisted living (if you can no longer live on your own and you can afford it)

· Find a side-hustle — another name for starting your own business

· And, along the lines of “do as I say and not as I do,” don’t sell your home and buy something more expensive with a bigger mortgage and a higher interest rate.

These are some of my thoughts. But I’m not an expert, so before you rely on anything I’ve said, you should consult someone who is an expert.

I’d love to hear your thoughts and ideas so please reply and let me know what you think. If you enjoyed this article, please follow me so you can see what else I have to say.

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