No Retirement Plan? There’s Still Hope – Even for Current Seniors

You’ve heard the verdict: if you wait until you’re over 60 to start planning for retirement, you’re in serious trouble. Financial education services experts agree that retirement strategies should start during one’s twenties. But that doesn’t mean there’s no hope for seniors who lack a plan, or that middle-aged individuals can’t take steps that will make a difference for their financial futures. We asked some financial professionals to weigh in on techniques people can apply during their forties, fifties, and beyond to improve their retirement outcomes.

As founder and CEO of Money Crashers, Andrew Schrage offers some advice for married couples to boost their retirement potential. “You need to know about managing household finances in a dual fashion, deciding whether you will merge your bank accounts or not (there are pros and cons to both strategies), and formulating a long-term savings plan,” explains Schrage. Couples must factor in funding their children’s education as they work toward their retirement goals. Then, Schrage adds, “As you age you’ll want to educate yourself on how to adjust your portfolio as you near retirement, and once you call it a career you’ll need to bone up on effective retirement distribution or withdrawal strategies.”

Mid-career (roughly age 35-50) is the time to understand the trajectory of one’s retirement savings, according to Spencer Hall of Tennessee-based firm Retirement Planning Services. Hall says, “People need to see projections showing what they will have at future checkpoints if they plot a similar course and how saving more aggressively will help them.” Then in their later careers (age 50+), people should gain intimate familiarity with the ins and outs of Social Security. “Extensive education is critical,” Hall stresses. “Failing to take advantage of complex strategies like filing a restricted application, filing and suspending, and others often costs tens of thousands of dollars or may keep them working a year or two beyond when they could otherwise retire.”

Managing investment risk forms another key to healthy retirement, suggests Frank T. Guiffre, Wealth Manager at Halliday Financial in Albany, NY. Between the ages of 50 and 70, Guiffre recommends, pre-retirees and retirees “need to understand when to scale back unnecessary investment risks (i.e. being too conservative or too aggressive), begin the transition into retirement, costs of retirement, cost of healthcare, long-term care, what Medicare will and will not cover, most importantly setting up an estate plan.”

Post-retirement, Guiffre goes on to explain that those over 70 should have a plan in place to distribute their assets, deciding whether or not they want to leave a legacy. “Debt should be minimized or paid off during this time,” he states. “They also need to learn about the cost of leaving money behind. Estate taxes may or may not be an issue.”

Nicole Middendorf, financial expert and author of Lipstick on the Piggy Bank, has important recommendations for the Golden Years. “We are good at buying life insurance, for example,” Middendorf asserts, “but fall short in knowing how to use it as an asset.” For example, while most people know that life insurance policies provide a death benefit, few understand the potential life benefit. “You may be able to sell your policy and use the cash for immediate needs,” says Middendorf. “It’s a big shame seeing people in their 60s, 70s and 80s who allow their policies to lapse because their premiums have tripled or quadrupled, when they could have sold those policies to Life Settlement companies for cash.” Middendorf cites an example from her client base where a couple in their eighties sold part of their life insurance policy to a holding company for $20,000 cash, keeping a $200,000 death benefit yet avoiding any further obligation to pay premiums.

Certainly the most successful retirement plans may begin in one’s youth. However, industry experts concur that there are plenty of steps people can take to improve their chances of enjoying their desired lifestyle during their Golden Years, even those who have reached senior age already.  Enrolling in a financial literacy programs, reading personal finance books and committing to a lifetime of working toward their financial goals are all important aspects to help them achieve a state of financial wellness.


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