All of us have one big transition facing us not that far down the road. Of course life is all about transitions. We make a transition from childhood to adolescence. We transition from being a child of a house to adulthood and independence. And we make big transitions through marriage, parenthood and even becoming a grandparent. But of all of these, maybe the one we need to focus on in terms of preparation is the big transition to retirement.
Moving from the world of work and the active life that all that entails to retirement and your golden years is a huge adjustment for people. There are lifestyle changes, changes to your goals and priorities and even in how people view you. But the changes to your finances are perhaps the ones you will notice the most. When you move from getting a steady paycheck to living on your Social Security and retirement, that is a major shift in your expectations and how you plan your life.
The saddest thing we see when it comes to people in late middle age are those who are depending on Social Security to be the sole means of their support in retirement. While Social Security is a fine program, it has created a false illusion of “security” that somehow the government will take care of you in your old age. The “brass tacks” truth is that if you are depending on any outside agency to be your means of support in your retirement years, your assurance that you will be conformable in your retirement years is not assured.
Even if you are currently working at a job that has a retirement program or a 401K that you put some into, you may still be allowing yourself to “depend” on your job to be there for you when you get to retirement age. And the horror stories of the elderly who finally arrive at retirement age to discover that what they thought they could depend on was not reliable are tragic.
This is why starting now to prepare for you financial future will be the best way you can be absolutely sure you will have what you need as you enter that time when you should be able to relax and enjoy the fruit of your labors. This is a major attitude shift and if you can accomplish it and take charge of your financial future, you will approach retirement with much greater confidence.
The outcome of your decision to take charge of your retirement will be that you won’t just let money get put away for you without any oversight on your part. You cannot always trust that the managers of your retirement account at work are handling the money correctly. By staying on top of how those funds are being invested and doing all you can to direct where those funds go, you are making sure that you get maximum return on your investment all along the way. And when its time for you to need those funds, you will be ready to use them because you are acutely aware of their value.
We cannot control Social Security and there is a chance it will be there for you when its time for you to retire. But instead of depending on Social Security, build a financial future that is secure whether it is there or not. Then when you retire and your retirement packages begin to kick and give you that lifestyle of leisure and financial safety that you want, if you do see Social Security add a few dollars to your monthly funds, so much the better.
By taking control over your financial future, you are putting the security of your funds and the planning that you will have what you need when those wonderful years come along. You are depending on the one person you know is in turn with what you will need and has always been abler to plan and provide for yourself and your family and that is you. It’s a good feeling to put the management of your financial future in your own hands in preparation for retirement. But it’s a wonderful feeling you worked hard to enjoy so you deserve it.
Saturday, April 5, 2008
Turning that Mortgage Around
Your house that you bought so many years ago represents one of the biggest investments of your life. By the time you approach retirement, if you have stuck with it, you may well have that house paid off. And with appreciation, that home may be worth twice or three times what you paid for it and you have all the equity from those years of house payments. Therefore, in addition to the joy you have had living in that house and raising your family there, that house is also can be a big part of your retirement planning as well.
It used to be that to take advantage of that equity when you enter retirement, you either had to sell the house and go live in a nursing home or retirement community or you took out a new mortgage borrowing against the equity and you find yourself paying huge interest payments all over again.
But a new kind of mortgage called the “reverse mortgage” is now available so a senior citizen who is preparing for retirement can begin to realize some of that equity as capital and not have to take on a loan payment or move out of their home. This innovative new program allows you to set up the equivalent of a home equity loan but instead of getting a huge lump sum, you can have the equity sent to you in the form of monthly payments so the equity of your home can actually become part of your monthly budget to supplement Social Security or other retirement funds.
What is great about the reverse mortgage type of financial vehicle is that you are never required to pay back the loan of the money that is based on your equity. The only time that loan amount would be required of you would be if you moved, sold the house or passed away in which case the sale of the house would realize the equity to retire the loan. In other words, if you take out $100,000 from your home for medical costs or just to finance a comfortable retirement living, you are not called upon to pay back that money and you can continue to live in the house for as long as you want to.
This is a phenomenal arrangement that seems tailor made for senior who want to enjoy their retirement years without financial worries and do so living in the house where they raised their children and a home that has become so precious to them. For children of a retiring parent, the reverse mortgage is a godsend because mom or dad can stay in their own home where they are happiest. And if they can keep the old homestead, the whole family will continue to enjoy coming to visit there, seeing the grandkids run and play in the same yard they grew up in and having holidays there as well.
Like some of the best programs for retiring persons, the reverse mortgage was originally put together by the US. Department of Housing and Urban renewal. It isn’t often that the government gets something right but they hit one out of the ball park with the reverse mortgage. It is a program and provides federally insured funds to seniors so they can supplement their income in a safe way that allows them to use the equity of their home for their retirement comfort without ever having to give up that home. And because the money coming out of a reverse mortgage is technically a loan, you never have to pay taxes on that money which is another big financial blessing.
The reverse mortgage is an option worth considering as part of retirement planning. It gives seniors one more option for keeping their homes. And that is good for everybody.
It used to be that to take advantage of that equity when you enter retirement, you either had to sell the house and go live in a nursing home or retirement community or you took out a new mortgage borrowing against the equity and you find yourself paying huge interest payments all over again.
But a new kind of mortgage called the “reverse mortgage” is now available so a senior citizen who is preparing for retirement can begin to realize some of that equity as capital and not have to take on a loan payment or move out of their home. This innovative new program allows you to set up the equivalent of a home equity loan but instead of getting a huge lump sum, you can have the equity sent to you in the form of monthly payments so the equity of your home can actually become part of your monthly budget to supplement Social Security or other retirement funds.
What is great about the reverse mortgage type of financial vehicle is that you are never required to pay back the loan of the money that is based on your equity. The only time that loan amount would be required of you would be if you moved, sold the house or passed away in which case the sale of the house would realize the equity to retire the loan. In other words, if you take out $100,000 from your home for medical costs or just to finance a comfortable retirement living, you are not called upon to pay back that money and you can continue to live in the house for as long as you want to.
This is a phenomenal arrangement that seems tailor made for senior who want to enjoy their retirement years without financial worries and do so living in the house where they raised their children and a home that has become so precious to them. For children of a retiring parent, the reverse mortgage is a godsend because mom or dad can stay in their own home where they are happiest. And if they can keep the old homestead, the whole family will continue to enjoy coming to visit there, seeing the grandkids run and play in the same yard they grew up in and having holidays there as well.
Like some of the best programs for retiring persons, the reverse mortgage was originally put together by the US. Department of Housing and Urban renewal. It isn’t often that the government gets something right but they hit one out of the ball park with the reverse mortgage. It is a program and provides federally insured funds to seniors so they can supplement their income in a safe way that allows them to use the equity of their home for their retirement comfort without ever having to give up that home. And because the money coming out of a reverse mortgage is technically a loan, you never have to pay taxes on that money which is another big financial blessing.
The reverse mortgage is an option worth considering as part of retirement planning. It gives seniors one more option for keeping their homes. And that is good for everybody.
The Who, What, When, Where and Why of Retirement
In the newspaper business, when a reporter wants to find out all about a case, they always ask the big five questions which are who, what, when, where and why. If the reporter can get these basic questions answered about any story, that is considered good research.
We can use the same approach as we begin to process the idea of retirement planning. It would be a mistake to only look at retirement planning as strictly a financial step. If all retirement consisted of was a change to where you get your money, that would be one level of change. But retirement also brings with it big lifestyle changes and changes to your priorities and how you use your time. So it’s a good idea to prepare for all of the changes retirement brings by asking the big five questions.
Who will you be retiring with is a very important question because your mode of living is going to change in every way imaginable. That man or woman who has been part of your life for so many decades will now become central to every move you make when retirement puts you together every day all day. So you should think that through and decide how you want to arrange your time so both of you still have your own interests, activities and friends but you can also enjoy a new closeness that retirement affords you.
What you will be doing with your time is a huge question as you walk away from the working world. Retirement is a great time to start enjoying those hobbies that never got enough time. You can catch up on your reading, write the great American novel or take classes to learn to paint or do woodworking. See retirement as a time when the sky is the limit for you to explore your creative side.
When you retire is a big factor on how much of your retirement savings you have to have ready by a certain time. For many, dipping into the retirement savings can be postponed for years. If you get to the point that you can collect Social Security and still make a fair amount of money part time or performing some cottage industry job, you might be able to keep your retirement savings growing even for the first five to ten years of retirement. And that means a longer more prosperous retirement time frame for you and your spouse as well.
Where will you live once you settle into the place you want to call your retirement bungalow. If you plan to sell the house and buy a condo or move into an assisted living center, there is a lot of preparation for both of those steps. There isn't time like the present to begin that retirement planning by getting the house ready to sell and by getting out and researching the best retirement living options for you to consider.
Why retire is more than just a philosophical question. You may be retiring because you got to a certain age and it is required of you. But to enter retirement with a good attitude, it’s good to find your own motivations for wanting to scale back your responsibilities and enjoy some leisure time as a senior citizen. And if retirement means more time for hobbies, chances to travel or enjoy time with your spouse or greater access to those sweet grandbabies, those are great reasons to enter the life of a retired person.
But the one question we did not list that may be more than all the rest is the “how” of retirement. How you go about moving from a life of working, selling the house and getting settled in a completely new world, perhaps with new friends and new objectives for living is a major challenge for anyone especially if you have been a productive member of the business or working world for many decades.
There are a lot of levels to the “how question”. That is why in a lot of ways the period of time leading up to retirement and doing retirement planning can be as active as retirement itself. But it’s good you are getting started now because by being prepared, your transition to retirement will be smooth and as painless as possible for such a big change of life.
We can use the same approach as we begin to process the idea of retirement planning. It would be a mistake to only look at retirement planning as strictly a financial step. If all retirement consisted of was a change to where you get your money, that would be one level of change. But retirement also brings with it big lifestyle changes and changes to your priorities and how you use your time. So it’s a good idea to prepare for all of the changes retirement brings by asking the big five questions.
Who will you be retiring with is a very important question because your mode of living is going to change in every way imaginable. That man or woman who has been part of your life for so many decades will now become central to every move you make when retirement puts you together every day all day. So you should think that through and decide how you want to arrange your time so both of you still have your own interests, activities and friends but you can also enjoy a new closeness that retirement affords you.
What you will be doing with your time is a huge question as you walk away from the working world. Retirement is a great time to start enjoying those hobbies that never got enough time. You can catch up on your reading, write the great American novel or take classes to learn to paint or do woodworking. See retirement as a time when the sky is the limit for you to explore your creative side.
When you retire is a big factor on how much of your retirement savings you have to have ready by a certain time. For many, dipping into the retirement savings can be postponed for years. If you get to the point that you can collect Social Security and still make a fair amount of money part time or performing some cottage industry job, you might be able to keep your retirement savings growing even for the first five to ten years of retirement. And that means a longer more prosperous retirement time frame for you and your spouse as well.
Where will you live once you settle into the place you want to call your retirement bungalow. If you plan to sell the house and buy a condo or move into an assisted living center, there is a lot of preparation for both of those steps. There isn't time like the present to begin that retirement planning by getting the house ready to sell and by getting out and researching the best retirement living options for you to consider.
Why retire is more than just a philosophical question. You may be retiring because you got to a certain age and it is required of you. But to enter retirement with a good attitude, it’s good to find your own motivations for wanting to scale back your responsibilities and enjoy some leisure time as a senior citizen. And if retirement means more time for hobbies, chances to travel or enjoy time with your spouse or greater access to those sweet grandbabies, those are great reasons to enter the life of a retired person.
But the one question we did not list that may be more than all the rest is the “how” of retirement. How you go about moving from a life of working, selling the house and getting settled in a completely new world, perhaps with new friends and new objectives for living is a major challenge for anyone especially if you have been a productive member of the business or working world for many decades.
There are a lot of levels to the “how question”. That is why in a lot of ways the period of time leading up to retirement and doing retirement planning can be as active as retirement itself. But it’s good you are getting started now because by being prepared, your transition to retirement will be smooth and as painless as possible for such a big change of life.
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