Building Wealth Later in Life Can Be Done - These Tips Will Make It Easier
Economic uncertainty, inflation, and market fluctuations make retirement planning more challenging. No matter, preparing for a future successful retirement requires time and effort. Don't be caught nearing retirement unprepared.
Maybe you remember the 1972 Liza Minnelli song "Money Money," where she sings, "money makes the world go round." She sang that whether it was a mark, a yen, a buck, or a pound, money made everything happen.
Money makes the world go round. Whether you like it or not, this is the universal truth—money can, to an extent, buy your way into a happy life. Money encompasses all aspects of our lives. There are even songs and movies about money.
As such, people are taught to start saving at a young age. In an ideal world, you'd be able to set aside enough for your future and enjoy your savings when you grow old. Unfortunately, this isn't usually how things are.
Saving sounds like an easy concept to learn, and it is! But, doing this in real life is quite challenging. Life is as unpredictable as it is beautiful—you never know what may happen. Given life's unpredictability, meeting one's financial goals could be impossible.
The Challenges of Saving Money
If saving money were easy, no person would have financial problems in their old age. With 22% of adults in the U.S. having less than $5,000 saved for retirement, while another 15% have no retirement savings at all, retiring without savings seems like a common problem.
Indeed, life is full of roadblocks preventing one from achieving financial security. These obstacles may derail a person's desire to save or keep them from saving money even though they wish to do so!
On the bright side, you can overcome these challenges if you know how to. But the first step is to identify the financial obstacles so that you can save your way to a secured future. Here are some common financial obstacles people face:
· Spending More Than You Can Afford
Of course, you deserve to spend the money you worked hard to earn. However, you must not only focus on the present—it's also crucial to keep the future in mind. This is what many people have trouble realizing. As a result, they end up dealing with a large amount of debt they must pay for until after retirement.
· Failing to Set Up a Budget
The path toward your financial goals will be long and thorny. So, you need to create a budget to guide you through your financial journey. Unfortunately, few people realize the importance of budgeting, especially for small expenses. This leads to bad decisions and an empty bank account.
Your budget is your friend. When you set a budget for yourself, you'll be more conscious of your expenses and meet your savings goal!
· Using Credit Cards Carelessly
Although credit cards provide a way to build credit and pay for expenses, they are also prone to misuse. Credit cards can serve you well when you know how to use them. If not, you could carry a balance and pay high-interest charges.
Overall, Americans owe $807 billion across almost 506 million card accounts. If you're one of those accounts, it may be time to rethink how you use your credit card.
In many cases, people fail to save up for their retirement, resulting in having to deal with a heavy financial burden without a regular source of income.
At this point, some may give up and think building their wealth is hopeless. But is there really no chance of achieving one's financial goals later in life?
Saving Up: An impossible Dream?
Building wealth with debt is undoubtedly tricky. In fact, some may even say that this would be an impossible task! With your youth behind you and no stable job, what chances would you have of living comfortably into your later years, much less building generational wealth?
Such is life, right? Well, what if we told you that there is hope? Building wealth later in life will present some unique challenges, but nothing you can't overcome. If you want to find out how to get started, follow these tips:
· Fewer Expenses, More Savings
As with any age, building wealth during your later years involves having to save less and save more. You don't have to make significant cuts immediately—start slowly and find small ways to reduce your total expenses daily.
For example, you can start making your own coffee rather than buying an expensive new one at a coffee shop. Switching to a different brand of item that is of equal quality can also help you save more. The next thing you know, you've mastered the art of saving and have more money in your bank account than in recent years!
· Diversification Is Key
While saving up is instrumental in helping you reach your financial goals, you can't get there faster without making the right investments. At your age, investing is crucial to earn, but to get great results, make sure to diversify!
By spreading your investments around, you'll have limited exposure to any one type of asset. As a result, you'll be able to reduce the volatility of your portfolio over time.
· Downsize For Your Future
Some people begin rethinking their lifestyles right when they begin to struggle financially. But did you know that you can also downsize before waiting for something bad to happen?
Downsizing isn't always an indication that one is struggling financially—it could also indicate that you're serious about saving money. Your new lifestyle will probably take some getting used to, but you'll thank yourself for making this decision in the future.
Unplanned Health Expenses
Even those with savings and well-positioned for their future retirements often forget one of the biggest risks we face as we get older, the need for long-term health care. The federal government reports that about half of us who reach age 65 will need help with daily living activities or supervision due to dementia.
Many people are unaware that health insurance, including Medicare and supplements, will not pay for long-term health care beyond 100 days of skilled services. Medicaid will only pay for long-term care services when someone has little or no income and assets.
Long-term health care costs are skyrocketing for many reasons. Because of increasing demand for care, inflation, and higher labor costs, these costs will continue to rise sharply in the decades ahead.
Self-funding future long-term health care is not the ideal plan since you never know when you may need care nor what the economic environment happens to be at that time. If you need care during a market correction, you might have to sell off assets at a loss. Often, the loss is still a taxable gain.
Not only would you be using your own money to pay for expensive care, but your family would also have the burden of deciding which asset to sell and what type of care you would receive.
Many families decide to add a Long-Term Care Insurance policy to their retirement plan. While nobody wants to add another insurance bill to their budget. However, the guaranteed tax-free benefits will safeguard income and assets and reduce the stress and anxiety placed on loved ones.
Partnership Long-Term Care Insurance plans offer additional asset protection on top of the benefits available from the policy. Most people obtain their coverage in their 50s.
Final Thoughts
Even if you think you were dealt a poor hand, you can do something about your financial predicament and thrive, even throughout your retirement years! Anyone can save up to save their future and build wealth that they and their succeeding generations will enjoy.
A financially secure tomorrow is within reach with the right attitude and practices.
About the Author
Sophia Young became a writer be able to tell stories and paint the world through her words. She writes on a variety of topics that interest her and her readers. Contact her at - sophguestwriter@gmail.com
Sophia Young
Contributor since September 16th, 2021
Editor's Note
It can be depressing watching the news. No matter how you get your news, radio, TV, newspapers, internet, or social media, everyone seems to have depressing stories. Don't get depressed; take positive action. You can control some things, but you cannot wait until a crisis comes to your front door. Can you protect your 401(k), IRA, 403(b), and other assets?
Preparing for retirement means saving money and understanding the income and expenses you will likely incur once you retire. One of the most often overlooked expenses is health care - the most significant expense is long-term health care.
If you need long-term health care today, the costs will run from $3000 to $10,000 a month, depending on where you live and the amount and type of care you require. That is not cheap. However, those costs will be dramatically higher if you need care in 15, 20, or 25 years.
You need to prepare for the costs and burdens of aging. People need long-term health care due to declining health, mobility problems, memory issues, and the frailty of aging. Since health insurance and Medicare (including supplements) will only pay for a handful of days of skilled care, you will be responsible for your future long-term care.
You will either self-fund and pay for professional care out-of-pocket, your family will provide care, or a combination of both. Unless you have little or no income and assets and qualify for Medicaid, being prepared will protect assets and reduce family stress.
The solution is affordable Long-Term Care Insurance. You will have access to your choice of quality care services, including in-home care. Your loved ones will have the time to be family instead of caregivers.
Most people obtain Long-Term Care Insurance in their 50s when they can take advantage of good health and lower premiums - How Much Does Long-Term Care Insurance Cost? | LTC News.
Planning Tools and Resources Available on LTC NEWS
Planning for the future is never easy, but long-term health care planning can be very complicated and comes with many emotions. Getting the right tools and resources will make the process much easier.
One of the goals is to reduce the stress and anxiety usually placed on your family at the time of crisis. LTC NEWS can be beneficial in providing you with important information for you to consider.
LTC NEWS has put in place several resources, including:
The LTC NEWS Cost of Care Calculator will show you the current and future cost of long-term health care services where you live. Plus, each state has vital state-specific information you should know - Cost of Care Calculator - Choose Your State | LTC News
The Ultimate Long-Term Care Guide is an outstanding read to help you get a good overview of the topic area.
Compare the major insurance companies that offer Long-Term Care Insurance products here - Top Insurers for Long-Term Care Insurance | LTC News.
A detailed tax guide that includes available tax incentives can be found by reviewing the Long-Term Care Tax Benefits Guide.
You might have questions and LTC NEWS provides the answers for many of the most asked questions here - Frequently Asked Questions | LTC News. Find all the resources available on LTC NEWS - Resources for Long-Term Care Planning | LTC News.
Seek Professional Help Planning for Long-Term Care
Long-term care is a very specialized area, and few insurance agents and financial advisors have the expertise. Find a specialist who represents the top companies as premiums can vary over 100% between insurance companies. Leading specialists will often have over 500 clients with Long-Term Care Insurance.
A specialist will save you money, and you will have peace of mind knowing they are making the appropriate recommendations - Work With a Specialist | LTC News.
Experts recommend seeking the help of a qualified and experienced Long-Term Care Insurance specialist to help you find the right coverage. A specialist will match your age, health, and family history with the right coverage at the right price.
Help for Older Parents
If your loved one is lucky enough to own a Long-Term Care Insurance policy, be sure they use it. Sometimes families wait, thinking they can save the benefits for a rainy day. Waiting on using available Long-Term Care Insurance benefits is not a wise idea.
If your parent or parents need help be sure to get them quality care. LTC NEWS can help. We have put together several comprehensive guides to help you in your process.
Start by reading our four guides -
Get Assistance in Filing a Long-Term Care Insurance Claim
Many insurance companies have issued Long-Term Care Insurance policies over the years. Filing a claim can sometimes be complicated unless you know what to do or get expert help and assistance.
Don't allow the claim process to stop you from using the benefits available in an LTC policy. Quality care obtained early will help provide a better quality of life and reduce the risk of a deep decline and facility care.
If you need help in starting the process of a Long-Term Care Insurance claim, LTC NEWS can help. LTC NEWS provides free assistance with no obligation to help you or a loved one complete the claims process with a Long-Term Care Insurance policy. We have teamed up with Amada Senior Care, who will do all the work - free with no obligation.
Get help finding quality caregivers or long-term care facilities and get recommendations for a proper care plan, whether a person has a policy. - Filing a Long-Term Care Insurance Claim | LTC News.
Advantages of Reverse Mortgages
Today's reverse mortgages for those aged 62 and older could be an ideal resource to fund a Long-Term Care Insurance policy OR even provide money to pay for care if you, or a loved one, already needs help and assistance. You might be eligible at younger ages as well.
Some people have much of their savings invested in their homes. With today's reverse mortgages, you can find ways to fund care solutions, care itself, and even help with cash flow during your retirement.
Learn more by asking questions to an expert. Mike Banner, LTC NEWS columnist and host of the TV Show "62 Who Knew" will answer your questions regarding caregiving, aging, health, retirement planning, long-term care, and reverse mortgages.
- Just "Ask Mike." - Reverse Mortgages | LTC News.
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You can write a story or ongoing column for LTC NEWS. You can write about many topics, including aging, caregiving, health, lifestyle, retirement planning, and long-term care, to name a few.
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