The economy has not yet entirely recovered from the recession that it witnessed in 2008. The job market has not also been able to create enough job opportunities for the unemployed. The returns generated by the stock market have been low or medium too. In other words, opportunities offered by the stock markets have declined. Returns generated by the bond market have also been reduced due to very low rate of interest. In other words, the so-called safe investments options have fetched meager returns. All these signal bad times for the retirees. Many of the retirees in the country are facing tough times to live a decent life. Here are our some recommendations for the retired persons or the would be retirees to tide over the situation.
Carry on employment
It is recommended that a person should continue employment till 70 instead of 65. This assures paycheck coming and the person continues to enjoy employer-provided health insurance, retirement-account contributions and other benefits. This also helps you delay your ability to claim Social Security benefits.
Delay Social Security claim
Each year you wait after you turn 62, your Social Security benefits go up by about 8%. These gains are indeed very significant and these are adjusted with changes in inflation. However, whether you would claim the Social Security benefits early or late would depend on your health and family consideration.
Have a look at the taxes
Given the serious budgetary crisis that the country is undergoing, it is likely that tax rates will increase in the near future. It is anticipated that 2 new related tax rate hikes – investment tax and Medicare payroll tax – will take into effect very soon. Again, a 2% cut in the Social Security payroll taxes will end in this year. Take all these tax rate hikes and withdrawals of tax cuts very seriously so as make a good retirement planning.
Mull over reverse mortgage
If you are over 62, you can mull over reverse mortgage. But your reverse mortgage move must be a very careful one. Reverse mortgage loans can help you get out from under mortgage payments and to remain in your home. However, in order to become eligible for such loan, you should have substantial equity in your home. The reverse mortgage scheme is however not free of controversies and carries high fees.
Opt for specialized investment strategy
It is advised that with age your investment approach gradually become more conservative. This is so because older people are more vulnerable to market crash and they have less time to recover. Your investment mix of stocks and bonds should be selected very carefully and it should be distinctly inclined to a conservative approach.
Apart from the above discussed advice, one important thing that you must take notice of is that you should not spend too much of your assets in a year. You need to ensure that you do not outlive your money. With adequate protective gear, you can attain financial stability as well as peace of mind.