In difficult financial times, individuals are often forced to reevaluate and rethink many of the plans they’ve made for themselves. Vacations and major purchases can be delayed, downsized or perhaps even eliminated altogether.
Another thing that can require rethinking in a difficult financial environment is retirement. Because retirement is such a significant decision (both in terms of the purely financial aspects as well as the emotional component), some people are reluctant to re-examine retirement plans that they may have had in place for a number of years. But a significant change in one’s financial situation, or in the overall economy as a whole, can make it necessary to rethink retirement.
Here is some retirement advice about how you need to rethink retirement in difficult financial times.
Rethinking the Date of Your Retirement. One of the most common approaches when rethinking retirement is for a person to adjust the date at which they plan to retire. Difficult financial times can negatively affect the timing of retirement on several fronts. Many people find that during bad financial times their retirement savings accounts (IRA, 401(k)s, etc.) suffer poor investment performance. This can come in the form of low investment returns, or even a loss of principal. If the difficult financial times last for a few years, and the investment savings losses are significant, it can be very difficult to stick to the original timing of one’s retirement plan because there simply isn’t enough money saved.
Rethinking the Place of Your Retirement. When a retiree has less retirement savings available than they thought they would, it’s often appropriate to rethink where they’re going to spend their retirement years. Retirees who are able to sell their homes at a reasonable price (or who are currently renting their homes) have the flexibility to move to another part of the state they’re currently living in, or perhaps to another state or even another country. While this type of adjustment will also require balancing other factors (such as being close to friends and family, and having to integrate into a new type of community, for example), in some cases the savings that can be found by moving to a new place for retirement is too much to pass up.
Rethinking Your Retirement Lifestyle. If a person isn’t willing or able to adjust the date on which they retire or the place in which they retire, then there is always the option of rethinking the planned upon retirement lifestyle. Many people picture of their retirement as one of leisure and relaxation. But that type of lifestyle can only be supported with a very significant retirement nest egg. For retirees who might have less saved, or otherwise find themselves in a difficult financial situation, a different retirement lifestyle may be appropriate. This can include a smaller monthly budget for living expenses, continuing to work through retirement (even if it’s just on limited or part-time basis) or both.
Perhaps the most important thing to do when rethinking retirement plans in difficult financial times is to be fully aware of one’s overall financial situation, and to be realistic about one’s retirement plans. Being honest with yourself is the necessary first step to readjusting your retirement expectations.
Tags: delay retirement, retirement advice, retirement planning
This entry was posted
on Tuesday, March 27th, 2012 at 7:05 am and is filed under Planning.
You can follow any responses to this entry through the RSS 2.0 feed.
You can leave a response, or trackback from your own site.
In difficult financial times, individuals are often forced to reevaluate and rethink many of the plans they’ve made for themselves. Vacations and major purchases can be delayed, downsized or perhaps even eliminated altogether.
Loading ...
[…] Advice on Rethinking Retirement in Difficult Financial Times […]
[…] Advice on Rethinking Retirement in Difficult Financial Times […]