Retirement Debt Problems Can Come From These Situations

Retirement Debt Problems Can Come From These SituationsThere are retirement debt problems that you need to be on guard for when you are nearing that stage in your life. It would be a shame to undo decades of hardwork just because you did not manage your retirement money well. You might be on track with your saving but a few wrong moves and you start to entertain the thought of going back to work because you do not have enough to retire on.

Retirement should be fun and it needs to excite you because you are about to enter a new phase in your life. You are about to disengage from the nine to five rat race and spend time doing what you love to do. This is a lot more exciting if you really did not love what you have been doing for the past few years. These things tend to happen and make retirement all the more appealing.

This thought makes it more important to take note of potential retirement debt problems. This helps you stay the course and be able to enjoy your golden years. If not, you will need to keep working for a few more years just to reach your goal. That is if you reach your goal because small miscalculations can end up costing you big time.

Compound interest is a great tool that helps you grow your savings and investment over time. When you miss out a few years of using it to your advantage, it might be hard to catch up to your goal. Not only will you save for the actual amount you should have put in, you need to factor in for the lost interest for all the time that you did not save. Here are a few more pitfalls in retirement planning you need to be aware of.

Co-signing loans

One of the retirement debt problems you can get into when you hit your golden years is deciding to help with loan applications of family and friends. It is not uncommon for family and friends to come up to you asking if you can co-sign a loan so they can be approved. The reason for this is that they believe you do not have any big purchases looming in the near future. That and the fact that you might have a good credit score. This is a quick way to get into financial trouble in retirement.

Once you agree to this, think of it like you are applying for a new loan under your name as well. Even if the other person assures you that they will keep up with the payments, once they miss one or two, your score will be affected as well. Worse, if that account goes into collection, you will start to get harassing phone calls.  

Grabbing quick-rich schemes

Retirement debt problems usually start when you begin to gabel with whatever amount you have saved up. You can make the argument that you are simply trying to increase your nest egg but the end will never justify the means. It takes a lot of hardwork and planning to ensure that you have enough funds saved for the future.

It will be enticing when someone approaches you promising you unbelievable returns on your investment with minimal risk. If it sounds too good to be true, there is a big chance that it is. What you might be thinking is that it gives you the chance to reach your goals faster. However, you might end up adding a few more working years. This is because you lost your investment and you are now further away from your goal from when you started.

Spending too much in a hurry

Once you hit retirement, you might be eager to spend your retirement money rather quickly. You go out and neglect the fact that you have a budget to stick to and run up quite a long list on credit card purchase. You lose your sense of direction and just go out and paint the town red. This is because you believe this is what retirement is all about.

Retirement debt problems will not be too far behind if this is your way of thinking. You need to remember that you worked long and hard to save up money for retirement. If you keep on spending like there is no tomorrow, you will soon find the need to go back to work. This is because you have used up all your retirement fund too quickly.

One you hit retirement, you need to stick to your budget and your plan. It is an exciting time for you but you need to keep your emotions in check. Be careful and continue to monitor your finances even in retirement. This is one way of guarding your funds and ensuring that you get to enjoy your golden years with your funds intact.

Charging too much in your credit card

This is a lot similar to being too excited at the beginning of your retirement years. However, this can happen over a long period of time. This might even be one of those financial habits that you need to change. Credit card use can help you manage your finances and even your budget better when done right.

However, when you lose control and start using your credit card aimlessly, you tend to rack up some big debt amounts. CNBC shares that credit card balances of Americans is over $6,000 so you better keep track of your spending. Try not to use your card for a purchase which you cannot pay for in cash. Once you use it to cover your cash shortage, your problems will start to come rolling in. You might even start to alternate and transfer credit card debt just to stay afloat. Debt is something you need to avoid when you get to retirement.

Lending money left and right

One of the most common retirement debt problems is lending money to family and friends. There is nothing wrong with your desire to help but not to the extent where you put your own finances in peril. There are a few reasons why family and friends seem to flock to you asking for help while you are in retirement. One is that they might think that you have no need for cash since you are already retired.

The truth, however, is the exact opposite. You actually need it now more than ever because you no longer have a steady source of income. When you retire, you are actually relying on what you have saved up for the past few years. This will be your main source of funds for all your retirement expenses and needs. Once you lend money to people, you are putting your retirement in danger.

Neglecting your health

When you retire, you need to make sure that you are still able to take care of your health. A healthy and sound mind and body keep you away from sickness. The healthier you are, the less you need to spend on doctor and hospital visits. It also helps that you get to enjoy a better quality of life when you are healthier in retirement. You get to do more activities even at old age.

There are a number of retirement debt problems you need to be aware of when you plan for your golden years. Knowing these potential pitfalls makes you more aware of what to avoid and help you prepare for them better.

Single Senior Finances And How You Can Manage It Well

Single Senior Finances And How You Can Manage It WellSingle senior finances are one of the points in your life that you need to plan for because you will have a tougher hill to climb than the rest. You need to understand that one of the components that makes old life easier is when you have a family with you. If you are going through it alone then it changes the dynamics of old age retirement.

If you start comparing it to traditional retirement planning, going at it alone is a lot different. Parts of your retirement planning might seem a little easier since you are only planning for yourself. However, you need to understand that this is more challenging because you would need to do everything on your own.

Single senior finances mean that you do not have any spouse or even children to help you with old age needs. You might have some friends from work or in your neighborhood but may not be enough. Besides, they might start to focus on their own needs as they get older. When that happens, they might not be able to help you as much as they want.

This and the fact that you are alone makes it all the more important to make sure you plan for old age well. While you can, you need to put in all the work to make it possible your golden years. There is no one else to rely on but yourself so better make it count. Here are a few things you might want to look into to help you prepare better.

Manage all debt payments before hitting retirement

While you can, it is important to manage your debt obligations especially if you are nearing retirement. If you are just starting out, try and plot out your payments to make sure that you pay everything off before you retire. This is important especially when you start to look at your big-ticket debt items.

For one, you need to make sure that you pay off your mortgage loan before you hit retirement. It will put too much stress on your finances because house payments tend to be a big amount in your expenses. Take a look at other big payments such as your student loans and even car loans try to work on the same timeline. Your objective is to pay these off before heading into retirement.

Carrying these debt payments while trying to enjoy retirement will cut into your retirement funds. You can make an argument that you can just sell the house and even earn from the sale. But these types of life and financial decisions need to be planned out very carefully. You also need to time these well so you are not left homeless on the street.

Look for ways to lower your expenses in old age will help single senior finances

Making every dollar count is important in single senior finances. You need to be able to stretch your budget to cover a lot in your expenses. This might even be a good time to start looking into a frugal lifestyle. Whatever you decide on, it is best to identify areas on how you can cut down on your budget expense side.

As mentioned earlier, joining the tiny house movement in retirement is one of the ways you can bring down your expenses. You might even be able to get a hefty sum from the sale of the house. However, timing is important in these types of decision. You need to make sure that selling the house and closing your purchase on the one you want to buy net are in succession. A hitch on one of the will either make you pay for two mortgages until you dispose of your old house or become homeless when you sell the old house but fail to close on the new one.

One other idea you might want to consider is relocating to a new place where the cost of living is relatively lower than where you are now. Forbes shares that Costa Rica is one of the top retirement countries at present. This can help you get more out of your retirement money. Choosing to live in a smaller house and in a new place may look daunting because you are doing something new. Just think of it as an exciting stage in your life where you get to meet new people in a new place.

Identify areas to increase your income

Once you hit retirement, you might have this notion of just hanging out in your porch the whole day reading newspapers or books or knitting whatever you want. Though there are some retirees who feel it is for them and this is their idea of single senior finances, this should not be your default thinking. If at all, retirement should be an exciting stage in your life.

For one, it can give you the chance to pursue something that you really love. That is if you did not have the luxury of doing the same while you were still working. Not everyone lands their dream job so retirement affords the luxury of going after what you really want to do. As an added benefit, you can even earn from it.

This becomes an income-positive hobby that benefits you in two ways. You get to spend time doing what you love doing. In this case, you will not feel like you are working at all. The money you earn can be used to add to your retirement fund. This can give you more elbow room to pursue other activities such as vacations or visiting family and friends.

Lower down your stress level

This is one of those objectives which are easier said than done but it does not mean it’s impossible. There are a few things to look into and try to lower down your stress level. For one, doing a hobby that you earn from can be great in reducing stress. If you love baking, then it can help you manage some stress in your life. The additional income, if you get to sell it, will even help with single senior finances.

You can also try and start putting in some exercise into your daily routine. It helps you feel food afterward. Not to mention that the stronger and healthier you are, the more it can help with your single senior finances. It lessens the need for doctor’s appointments and even hospital emergency visits. You might also lower the need for maintenance medicines.

Look for new friends

If you do decide to retire elsewhere and buy a smaller house, it is important to make new friends in your new place. For one, you will need the support system once you find it harder to move around. If your finance allows it, you can check out assisted living facilities so there will be people taking care of your every need.

Single senior finances might be daunting for single people who are about to enter into retirement. It might feel like you are going to be up against everything all by yourself. However, this is not the case because there are a lot of living arrangements you can opt to make a comfortable life in retirement. You can still have a full life in your golden years if you start preparing for it early on.

Elder Orphan Finances And How To Plan For It

Elder Orphan Finances And How To Plan For ItElder orphan finances might be something you haven’t thought of but is certainly a possibility for a lot of people. There is no question that older single and childless people are more at risk when they get older. This is compared to people who still have a partner and kids. Facing medical problems as well as financial ones is a lot more challenging for elder orphans.

It might not sound that big of a deal but there are a lot of seniors who are having to face their golden years all alone. They do not have a partner or children to look after them. In fact, in a recent article released by Time magazine, there are a lot of people in that demographic. The chief of geriatric and palliative medicine at Northwell Health Dr. Maria Carney shares that there are about 22% of people aged 65 and up who are elder orphans or could become one.

Elder orphan finances is a lot more than just trying to save for old age alone. Though it is an important component to make it possible for seniors to live comfortably on their own, they need to look at other aspects as well. These can be learning about the resources they can take advantage of in the community or even senior-friendly housing.

Here are some of the things you need to look into when you are getting to old age alone.

Forward planning

One of the most important aspects of elder orphan planning is doing it early on when you are still healthy and able. This is one of the planning aspects often overlooked by single people who are nearing retirement. Time is a commodity that can easily slip past the grasp of people when they are not paying too much attention to it.

Elder orphan finances mean knowing early on where you will be spending your retirement years. You might want to consider an area that is easy and safe to walk around in and mass transportation is accessible. You need to identify places of need and interest from the hospital to the mall and even the airport. All these will factor in when you start looking and saving for the perfect place to retire.

Prepare legal documents ahead

Part of the preparations you need to make for old age retirement is putting all the paperwork in place. One thing you need to look at would be your last will and testament. This is quite tricky when you really do not have any family members to leave an inheritance to. However, creating one gives you the power to decide over your estate rather than the government when the time comes.

It is also important to have your health and financial proxy in place because you never know when you will need it. When you get incapacitated, you need to make sure that you nominate the right people to decide on your behalf. However, when you are looking at elder orphan finances, it is because you do not have anyone to depend on when you get old. This makes assigning a proxy quite challenging.

One thing you can look into is elder care resources in your region. There are also cases where your doctor or their colleagues might be willing to step in as your proxy. You just have to remember that when a doctor does this, they cannot continue to be your healthcare provider because of conflict of interest. You can also try asking a friend, niece, clergy, or even a lawyer as a proxy.

Widen your social network

It does not mean you should start spending more time online and growing your online social network. It simply means you have to make new friends as you grow older. For one, old friends might live quote far from you or caught up with their own needs. This means you have to look for new friends as you get older especially if you are in a new place.

One of the things you can do is to consider joining clubs in your area to have new friends. It is also possible to start volunteering or even taking some classes. Look at activities that you already love in the first place. Constant exposure to a new group of people could lead to the friendship which will be valuable for you in the long run.

There are others like you

There is a big chance that as you are planning for elder orphan finances, there will be others just like you in your area. You just have to make an effort of going out and looking for them. You can use social media to look for them or you can ask around so you1 can connect with them. Of course, once you develop a friendship, this should go both ways. You also need to look after them just as they would do the same to you.

Think creatively

This is one area in elder orphan finances that should excite you because there are a lot of ways to go about it. For one, you can use technology to help you manage old age without much help. There is a growing number of home-delivery of services and even products aimed at elder orphans. This can even include doctors making house calls.

There is also some in-home technology available that will help remind you to take your medicines at different times of the day. As you get older, your memory can slowly fade and it is a lot harder to remember even simple things. Technology like Amazon’s Alexa can jot down recipes for you as you dictate. This helps you with grocery shopping the next time around.

When it comes to living situation, you can also consider taking in roommates so there will other people in the house looking after you. If your elder orphan finances will allow it, you can consider transferring either to a senior community or in an assisted living facility. There are even some older people who choose to adopt to have family take care of them and to have someone bequeath their inheritances to.

Cultivate your hobby

One of the things to keep you busy and fulfilled at the same time is to look at income-positive hobbies to keep you busy during your retirement years. If you love baking, you can start selling to family and friends. You can even look for a weekend market nearby to have an outlet for your goods when you are off at work. Doing so helps you with any financial needs as you age but it keeps you busy as well. This also prevents you from overspending as you are focused on your hobby.


There are a number of considerations when you start to look at elder orphan finances and there are a lot of ways to prepare for it. You need to do it early enough while you still can because doing it when you are already old and unable to make decisions on your own will be too late. It is also possible to think that you are all alone but there are a lot of people who can help you. You can start with distant relatives, members of your church, or even your doctor. The bottomline is you have to prepare for it early and you can have a full life even if you do not have family in the end.

Having A Side Gig Benefits Your Whole Life

Having A Side Gig Benefits Your Whole LifeYou might have heard someone taking on a side gig to complement their take-home pay. It is becoming a new normal especially coming from the recent Great Recession. A lot of people are now trying to look for ways to increase their income. It helps them budget better, pay for their expenses, and more importantly, prepare for unforeseen incidents.

This is because a lot of people were caught off-guard when the 2018 Great Recession hit the country. There were about 8 million jobs lost and about 1.2 million homes lost during the Recession. Many people are still trying to get back up on their feet fixing their finances. Some are already thinking ahead and strengthening their emergency fund.

In both these situations, having a side gig will be a big help in helping your finances get to a point where you will feel comfortable, or at least safe. Safe in the sense that when another unforeseen incident arises, your finances will be able to handle it. You will have that buffer you need to get it through and weather the storm.

It might surprise you to know that the gig economy consists of about 34% of the total workforce according to reports from CNN. According to the same report, it is expected to go as high as 43% in 2020. With these numbers, it is safe to say that a lot of people are gravitating towards taking on a side job. Here are a few of the actual benefits it brings you.

A side gig provides you additional income

This is one of the most obvious reasons why people want to take on extra side jobs. As mentioned earlier in the article, it helps increase their take-home pay and gives people the chance to create an elbow room in their finances. It is quite hard to try and live from paycheck to paycheck because one wrong move and you are back in debt.

If you are in debt, having an extra source of income is a welcome development. This is because the extra money you get can help you pay for your financial obligations. If you have been forced to pay just the minimum on your card, you can now pay more than that or even pay it in full. You can finally get your car fixed or even get up to date on your house payments.

If your finances are on track, the extra money you get can help you move forward faster with your goals in life. For one, you can strengthen your emergency fund to tackle unexpected situations in life. You can also put more into your retirement account. The extra money can even help you max out your 401(k) contributions and take full advantage of an employer matching program.

It allows you to pursue your passion

A side gig can also help give you the chance to pursue things that you love to do. This would be challenging or even close to impossible if you are on a shoestring budget. Rather than pursue something else, you would simply put all your efforts into meeting your payments. You would not have the time or the resources to do anything else.

If you are able to find a gig that involves your passion or hobby, then good for you. Not only will you be able to earn extra money, you get to do something you love as well. That is a win in most people’s book because that does not happen always. There are people who feel they are trapped in their line of work and stay there because of the bills they have to pay.

For some, they are not as lucky to find a sideline job that they want. Maybe it was there for convenience’s sake like dog walking or tutoring the neighbor’s kids. This is still a good way to earn money. It can even give you the ability to take on your hobbies with the little extra you make.

Retirees find purpose

Retirement is a completely different experience and people usually forget to plan for activities once they retire. Most people’s idea of retirement is not reporting for work and staying in watching tv all day. Though it really depends on you on what you wish your retirement to be, a lot of retirees feel differently especially when it comes to working.

A Gallup survey revealed that about 63% of retirees plan to work part-time after retirement. This simply means that a lot of retired people would be looking for a side gig for a number of reasons. Some would obviously do it for the money. Any source of income after retirement could be a big deal. They can use it to buy medicines, eat out, or even set it aside for the rainy day.

Then there are those who would do it to find an alternative way of spending their time. They can devote their time to pursuing a passion no matter how much they make out of it. The already have what they need to live out their retirement anyway. The money is a plus but they do it simply because they love what they are doing.

It keeps you occupied

There are times that you need a side gig to keep you preoccupied. It is possible that you may have a lot of time on your hands due to different situation in life. For one, retirees have a lot of time on their hands that is why they can pursue any sideline work. There are also students who need it and may want to put the extra time to good use.

You might also have a lot of energy even after you get home from work so looking for something to do and earning from it seems like a good choice. You can take up online work writing articles, designing artwork, or even managing projects for other people. This is all possible without having to leave the comfort of your own home.

Weekends are also a great time to look for a side job you can do. If you have a particular hobby you are good enough for people to pay you for it, then you can explore that. It can be baking on weekdays and selling them at a nearby market on weekends. If you love photography, you can offer your services to family and friends for a minimal fee.

There are a lot of benefits you would get from taking on a side gig whether to augment shortage on your own income or to spend time wisely. What you need to keep in mind is that you can do this at any point in your life. As a student, you can take on side jobs to help you pay for school. Cost of attendance is one of the biggest problems of students nowadays. When you are already working, you can take on an extra job to make use of time and energy you both have. Retirement can also be a good stage in your life to consider doing some part-time work. The bottomline is that you can take up extra jobs to help you reach not only your financial targets but your life goals in general.

Retirement Planning Mistakes You Need To Avoid

Retirement Planning Mistakes You Need To AvoidAs you try and plan for your future, there are a number of retirement planning mistakes you need to be on the lookout. This helps you guard current finances and guides you better into your future. Retirement is not a question of “if” but more of “when.” For some people, it comes faster than they think while for others, they overshoot their timeline.

There are a number of factors that lead to when you get to retire. One of the biggest factors is your start date. You might have heard people saying that the earlier you start with it, the sooner you get to retire. More than just saving early, you get to take advantage of using compound interest to your advantage as well. You need to keep in mind that that average retirement age is now at  66 According to a Gallup survey.

This is one of the retirement planning mistakes people make because they do not have an idea what compound interest is. It is one of the most useful tools when you are trying to save money for future use. What this is is that it allows you to earn interest on top of interest every month. If you have $100 earning 4%, a year will yield you $4. This will then be added to your principal amount. On the next year, you will have $104 earning 4% which is $4.16. As your principal gets higher, your interest earning increases exponentially as well.

This is one of the reasons why you need to save as much and as early as possible is because of your compound interest. It is a retirement mistake when you do not take advantage of it. You will fall behind on your target and miss the chance to retire on your target date. Apart from this, there are a few other mistakes you might commit when it comes to retirement planning. Here are some of them worth looking into.

Thinking that retirement is a long way out

For a lot of people especially the younger generation, they believe retirement is too far away. This is one of the most common retirement planning mistakes which robs you of the chance to retire either on time or earlier than planned. Once you already have this mindset, it now becomes a challenge to save for the future. This is because you believe that there are far more important things to attend to at present.

That may be true where there are immediate needs that require your attention. Bills, utilities, student loan payments, and even mortgage and car payments. However, there you need to understand that retirement will be upon you sooner than you think. Time flies by so fast that you might be surprised you are already nearing it.

The beauty of retirement planning is that consistency early on is the key. You do not have to put in all your extra money into an IRA or your 401(k) at work. You just have to get started with it. The more you get used to it, the easier it would be to save up continuously as you go along. You can also increase the amount a little every year.

Foregoing an employer-matching program is one of the retirement planning mistakes you can make

This is one of retirement planning mistakes people usually make when planning and saving for their nest egg. There are a lot of employers who offer this benefit in the workplace in a bid to attract and retain employees. This is a financial investment on the part of the company to help its people plan for their retirement in the future.

The way it works it that your company matches a percentage of the amount you put into your 401(k). One of the most common programs is the 100% of the first 6 %. This means that the company matches the contribution up to 6% of the gross pay of the employee. This means that if you have a $50,000 annual pay contribute $3000 (3%) of it to your 401(k), the company matches and puts in $3000 as well.

That is why a lot of experts refer to this program free money. Not only will it help you increase your retirement fund, it can also play a big part in how compound interest is computed and added. You just have to make sure that you understand the vesting schedule set by your company. You might lose a lot if you leave the company and transfer to another job.

Gambling on your nest egg too close to retirement

It is not always talked about but one of the retirement planning mistakes people often make is that they take a huge risk too close to retirement. One of the reasons why people do this is because they want to make quick money to help them reach their retirement goal. They might think that taking on a lot of risk for a lot of return is the answer.

It is true that the higher the risk, the bigger the potential reward and a lot of people go into this gamble. However, one thing you do not have is time. If you were to lose a lot of money with that risky move, it will set you back years of work. This means that you have to keep on working just so you are able to save what you need for retirement. You can make the argument of what if you win, but investments are never a sure thing especially the risky ones. If you would have made this risky investment early in the game, you would still have a lot of time to recoup your losses. But if you lose a big amount too close to retirement, you’re in big trouble.

Gambling on your retirement fund while in retirement

You may not go into risky investments before retirement but you also need to be careful with how you manage your finances while in retirement. A part of retirement planning mistakes is not thinking about how you invest your money while in retirement. It is not just about putting your funds in a savings account all throughout your retirement. It should be part of your planning to keep an eye out for possible investment opportunities.

However, what you need to be aware of is that you are no longer in a position to take on high-risk investments. It is better to opt for low risk, low return opportunities. This way, it keeps your principal amount intact while being able to earn more than just what a savings account can offer. You need to be on guard as well on investment scams targeting retirees.

Thinking that you have to fall into a specific identity in retirement

What is your idea of retirement? Is it something you see on tv or an idea your officemates have? Are you planning to simply follow what your parents did for their retirement? One thing you need to understand when it comes to planning for retirement is that you need to know what you want for yourself. You can certainly look at what other people are doing but you need to decide for yourself. Define your retirement before you start saving money for it. Doing so will help you concentrate your efforts on your objective.

There are a lot of retirement planning mistakes people make that is why they are having problems during their golden years. That is why it is best for you to know these common missteps to help you plan better.