8/22/2017


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Risking Your Retirement

This is not the time to risk any part
of your retirement nest egg.

As we all know, even though the economy is showing signs of improvement, things are not going as great as we would like to see, and the economy may take a few years to fully rebound. Because of the number of people who are unemployed, salary cuts, and frozen wage, inflation is being held in check. But as the economy recovers and more people go back to work, more money will become available for spending, thereby increasing the likelihood of inflation.

Putting people back to work should be the immediate goal of everyone in the government starting with the President and Congress. Private sector businesses should also work towards rebuilding, retooling, and rehiring. This will create the stimulus for expansion and growing the economy.

Even as the economy starts to improve, we should not lose sight of what happened over the past few years with the stock market, real estate prices, and our inability to control our own financial health. And more importantly, we all should have learned a valuable lesson about not putting all of our retirement eggs in one basket.

As we have seen in the past, the stock market is a great investment tool, but as we have also seen, investing in the stock market can be risky. The stock market can create untold wealth if you are willing to take risks but it can also bring disaster to those who are not savvy enough to buy and sell their stocks at opportune times.

Many elderly Americans have tapped into the equity in their homes to the point in which there is nothing left. You see this every day on the news and read about it on the internet. With property values hitting rock bottom, many retirees have found themselves in a precarious situation. They don't have enough income from their pensions and social security to pay their mortgages and living expenses so they are finding themselves being forced out of their homes through bankruptcy and foreclosure.

In the past, a home was a sacred investment. You didn't borrow against the equity unless it was absolutely necessary, and you paid your home off so you could have somewhere to live in relative comfort when you retired. Then along came the experts who advised people to take the equity out of their homes and invest it in the stock market or other investment vehicles. For some people, this was good advice, but to many others, especially those who are not savvy in making those types of gambles, it has proven to be disastrous.

Retiring to early has been another real concern for people who thought their pensions would pay enough to carry them through until social security kicked in. Many are now wishing that they had worked a few years longer. The longer they would have worked, the larger their retirement incomes would have been and it would have allowed them to get increased social security payments, too.

  • Social security and pension payments are automatically adjusted for inflation. Some people hold off on collecting their social security to get bigger payments.

How did we allow greed to overtake our common senses? It was easy. We were led to believe that everyone could gamble and get rich. Everyone wants to live comfortably when they retire, but it has gotten to the point that we all want to live as millionaires for the rest of our lives. We have been convinced that is fine to gamble with our life savings, our homes, our investment dollars, and, as we have painfully learned, many people of retirement age have lost their life savings.

What do you do now? Have you found yourself worrying about how you are going to make your mortgage payments? Do you think you are going to run out of money? If so, you are not alone. Millions of retirees and those who are at retirement age are struggling to rebound from their losses. It will be tough, but it is doable.

It is never too late to start over again and it may not be as hard as you may think. You may have to make some changes in your thinking, especially your thoughts about how you want to live in your retirement years. Your lifestyle may have to be adjusted to fit your new reality, also. You may have to sell your home and settle for a smaller one, or you may have to move into an apartment. The amount of travel you intend on doing make have to be scaled back. You may have to give up the idea of buying a motor home or boat.

Regardless to the changes that you may have to make, securing your financial health for your retirement years should take precedence over everything else. Begin with the things you can absolutely live without and start from there. You may find that slight adjustments can make a big difference in your overall planning and you should never lose sight of your retirement goals even if there have been setbacks in your financial egg basket. Stay positive and keep working your plan.

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