Retirement is supposed to be the time to enjoy your golden years. It may seem like the perfect time in life, but it doesn’t always work out that way. For some, retirement can be a difficult and confusing time, especially if they’re struggling financially.
While some people were fortunate enough to have planned ahead and saved up a lot of money before retiring, others either didn’t save enough or were struck with unexpected expenses that decimated their savings.
If you currently find yourself in this situation, retired and not able to make ends meet, you might be wondering how it happened, and it can be tempting to feel sorry for yourself, but instead, take this opportunity to think about how you’ll get back on your feet.
Whatever the reason may be, there are ways that you can improve your financial situation after retirement. Here are 7 must-do’s if you’re retired and broke.
Tip #1: Create a budget for your monthly expenses and stick to it.
In order to make sure you have enough money for the month, it’s important to create a monthly budget. This is as true during your early years as it is during retirement.
First, figure out what you’re spending your money on by looking at your bank statement and seeing where your expenses are going at the moment. Then, write out a monthly budget that includes those expenses and any additional ones that might pop up throughout the month.
Tip #2: Clear out any outstanding debt.
If you are retired and have outstanding debt, it’s important to clear it out. Not doing so will only mean money down the drain paying interests as well as a considerable amount of stress. You probably think that this is easier said than done, but there are several ways to go about it. One option is to sell some of your unused possessions to get the cash needed to pay off the debt.
If that’s not an option for you, you can also get a debt consolidation loan from a financial institution. This will make it much easier to repay all of your debt at the same time while lowering interest rates. Another way is to focus on paying off the highest interest rate loans first, so they don’t suck up more of your monthly funds.
Tip #3: Learn how to invest.
Regardless of your age, the worst time to start investing your money is tomorrow. If you never invested during your youth, you may feel apprehensive about starting now, but it’s definitely something everyone needs to start doing.
Retirees have several options when it comes to investing their money, some riskier than others. Buying assets like Dogecoin or company stocks like Tesla can be risky, but they also offer a great opportunity to make your investments grow faster. You can also invest in bonds or other safer assets, but the returns on those are usually very low and will only compound appreciably after a good number of years.
In any case, learning the ropes is essential and should be the very first thing on your mind before risking your money.
Tip #4: Start your own business as a retiree entrepreneur.
Starting your own business isn’t for everyone, but it may be the perfect opportunity for you. And if you’re retired and broke, this can be a quick way to get back on your feet financially while at the same time doing something you love.
There are several reasons why starting a business as a retiree is a good idea. Some of these include:
- staying active,
- pursuing your passion or favorite hobby, and
- creating a new source of income.
Some ideas of good startups you can work on as a retiree are setting up an online shop, selling homemade goods, becoming a florist, etc.
Tip #5: Set money aside for an emergency fund.
Retirees need to put away a decent amount of cash to be prepared for emergencies, especially if they don’t have many sources of income. Unexpected medical bills, for example, are an important cause of financial distress during retirement, so having some backup money will give you some much-needed peace of mind.
In terms of how much you should save, maintaining at least six months’ worth of living expenses in the form of liquid savings like cash or stocks that you can easily convert into cash is a good number to aim for. Putting your savings in a high-yield savings account is a good way to compound interest as time goes by.
Tip #6: Cut down on housing costs.
Housing is one of our major sources of spending, so it’s also the best place to start cutting costs since they can also have the highest impact. It may sound easier said than done, but housing costs can be cut down in various ways, including downsizing or moving to a smaller home, renting out one or more rooms of the house, moving to a continuing care retirement community or CCRC, and more.
Tip #7: Join retirement clubs, AARP, AMAC or similar.
Retirement clubs and non-profits like AARP and AMAC are all great organizations to join for seniors. These organizations offer a wide range of benefits, including financial assistance when needed and senior discounts.
The American Association of Retired Persons (AARP) is an organization that offers a wide range of services to retired individuals. For example, they have a Tax-Aide program to help senior citizens prepare their tax returns free of charge. They also offer a variety of insurance programs, such as Medicare supplement plans or long-term care coverage, all of which can help you on your way to a financially sound retirement.
Joining AMAC is another great idea for retirees, and it offers similar benefits to AARP. These include free legal assistance, financial education seminars, and discounts with various retailers, which will help save up on your monthly bills.
The Bottom Line
Being in retirement with little or no money can be stressful, but it’s not the end of the world. You can take steps to improve your financial health even when you’ve reached retirement age.
From budgeting to cooking at home and from investing to starting a business — there are many options available to seniors that will reduce spending, increase income or both. In the end, these tips will help you get back on your feet as soon as possible.
We all need help from time to time
If it comes down to it, we all need help from time to time. Don’t be shy about asking for assistance or support from loved ones who care about your well-being and future prospects. The most important thing for any retiree is their mental state – staying positive. Avoiding stress will keep things manageable until your finances start looking up again.
As long as there are no glaring issues like creditors hounding you or taking legal action, don’t get too worked up over your current scenario. It may take a bit of time and patience to improve things but rest assured they can improve, and it’s well worth the effort in the long run.