Many retirees across the globe find it very difficult to cope financially due to two major reasons; mistakes committed while still in employment and failure to invest retirement benefits. Indeed, most live in abject poverty, which makes those still working dread retirement. The good news however is there are several ways on how to avoid going broke after retirement. It only requires commitment, resolve and focus on your part to have financial dependence and the comfortable life in retirement.
Social security – One of the mistakes that most employees do is to claim their social security before their retirement age. This is a mistake that must avoid at all costs if you wish to have a comfortable life in retirement. There is really no rush in claiming your social security; you can still make use of your current earnings and spare your social security for the future.
Home equity – Taking out reverse mortgage when you have not yet retired can simply mean being broke in retirement. Treat your home equity (if you have it) as an emergency fund while in retirement. It can be very valuable when you will need to settle medical bills, home repairs and hiring in-home help.
Overspending – This is certainly not how to avoid going broke after retirement. It is the worst thing you can do while still working. Although it is perfectly in order to live a comfortable working life, it is appropriate to do so with retirement in mind. This is the time to take a close look at your income and living expenses with the aim of getting rid of unnecessary expenses. However little you save now will go a long way in ensuring that you have a comfortable life when you finally retire.
Failure to seek financial advice – Do not fail to seek financial advice while still in employment. Talking to a financial advisor helps you manage you finances appropriate in addition to enlightening you on the best investment opportunities that can held you avoid going broke after retirement.
Over borrowing – Accumulating huge debts when you are about to retire can easily drive you into bankruptcy after retirement. Ensure that you go into retirement after settling all your debts. Waiting to settle your debt with retirement benefits will simply leave you broke in retirement.
Going into retirement does not mean living a pathetic life without any financial freedom. You can still live a comfortable life in retirement by simply knowing how to avoid going broke after retirement.