Living the American Dream isn’t all that hard when you’re gainfully employed and making steady money. You might even be investing a certain amount into assets every payment period which might include traditional stocks and bonds, plus some decentralized crypto assets like Bitcoin.
Yet when retirement rolls around (and it comes quicker than you might expect), too many of you realize you’ve failed to save enough to keep you in the life-style you’ve become accustomed to. So then, what’s the true definition of the American Dream? Living the way you choose and being able to comfortably pay for it.
With that in mind, if you are over 62 years of age and have been living in the same house for decades while keeping up with the monthly mortgage payments, you just might qualify for a reverse mortgage loan. This kind of loan will allow you to tap into all that equity you’ve been building up all your working life. The equity can run into hundreds of thousands of dollars, depending on where you live and the condition of your home.
You can take your proceeds in one lump sum payment, or you can choose to take it in monthly installments. Whatever the case, these proceeds will not only allow you to maintain your version of the American Dream, you might even be able to enhance it. To find out how much of a reverse mortgage loan you are eligible for, go to this online calculator created by All Reverse Mortgage.
But with this option in mind, what are some other ways retired women can maintain the lifestyle they’ve become accustomed to while in the workforce? According to a recent Forbes financial report, all women should keep one glaring fact in mind: they tend to live longer than men. This translates into added financial pressure.
So the, how do you go about making your money last in retirement?
Plan, Plan and Plan Some More
Say the experts, you need to start thinking about where your income will be coming in during retirement. Make sure you know all about the ins and outs of your social security benefits and where your other cash will be coming in and when.
One financial planner cautions that if you’re a woman who isn’t married and you’re in your fifties and don’t have a pension to rely on, “you’d better be doing something fast.” Many single women who aren’t aggressively saving in their fifties run the risk of running out of money soon after retirement.
Women need to realistically estimate how much cash they will need to live on or even to keep them in the style they’ve grown accustomed to while in their working years. Anticipate how much you’ll need on a monthly basis and not about “a total savings-figure goal.” You need to break it down month to month.
Determining if You’re On Track
One website can help with planning for your retirement. It’s called Choosetosave.org. It’s “Ballpark Estimate” option can help you determine if you’re on track to realistically meet your retirement savings goals.
Some financial advisors urge women to avoid claiming Social Security at age 62 which is the earliest possible age to collect. Instead, women should wait to take their Social Security benefits until they have reached full retirement age which generally speaking is around 66 or 67. This is due to the fact that your social security benefit will 8 percent larger for each year you delay.
Says one financial analyst, “every year you take Social Security earlier is like losing an eight percent bonus in your paycheck.”
Advice for Choosing a Retirement Target Date
Experts advise that women should be careful about investing for retirement with a “target date fund” which can be via an employer’s 401(k) savings plan or another type of individual retirement account (IRA).
The key is to examine how the target date fund appreciates as you get older. One common mistake is having chosen a target date fund that’s heavily invested in bonds. But today, if you’re over 60, you should be aggressively investing in both stocks and some cryptos like Bitcoin. With that in mind, you need to choose an updated investment mix for your target date fund.
If you’re a woman, especially a single woman, who is nearing retirement age and your financial future is keeping you up at night, be sure to contact a financial advisor at your earliest convenience.