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Creating a Safety Net That Doesn't Rely on Social Security or Medicare

Updated: Nov 12, 2023

Guest Post By: Courtney Rosenfeld

If you worry about supporting yourself in retirement, you aren't alone. A poll by Allianz suggests that these days, seniors worry more about money troubles than dying.

You don't want financial stress ruining your golden years. For maximum confidence, it's best not to rely solely on Social Security or Medicare alone, whether you are in the US or abroad.

Luckily, there are plenty of tips and tricks you can use to get a handle on your finances in retirement. Angelina Carleton Legacy Planning's team shares some ideas to get you started.

Diversify your investments

Investing is one way to help fund your retirement. Instead of just putting all of your money into savings, where it can't grow, consider parlaying some funds into different investments. The key is to diversify so that you don't have all your eggs in one basket. Barclays explains that this approach helps to protect your money and minimize risk.

If you are new to investing, it's best to get a financial advisor as your starting point - though no one will care more about your money than you. Advisors can help ensure that you make smart decisions and avoid substantial losses, in being a sounding board and offering insights. Add at least three advisors to your team if it's possible as 'gather information'.

Look for ways to earn money in retirement

You don't have to stop working just because you're a senior. A part-time job can be a wonderful way to stay active and social while earning some extra money. Great jobs for seniors include education, child care, and retail. Before you start scanning for opportunities that match your life's experiences and skill sets, update your resume. Returning to bring your resume to your current status today is essential for presenting yourself in the best possible light in showcasing your skills and accomplishments.

One great capacity of the 'Baby Boomers' and those in the senior generation is their commitment to their values because of how you were raised ... in your era. That's gold as many employers and entrepreneurs seek others they can trust and rely on.

Start your own business

If you can't find a job you love, you can pursue entrepreneurship instead as another option ... have you ever heard of franchising? Starting or buying your own business gives you greater freedom and flexibility. Founding a limited liability company, LLC, protects your personal liability in case of legal problems and offers tax advantages. Skip the expensive lawyer fees and use an online business formation service to register your LLC. Or buy into a franchise in getting educated about which businesses are meeting today's trends.

Consider downsizing your home

Many seniors move to smaller homes as they get older. Consider downsizing to save money on home repairs and management. Alternatively, you may want to think about moving to an assisted living facility. Research the prices and payment options of assisted living facilities in your area to determine how much money you'll need to cover the cost of living in one. Additionally, compare facilities according to amenities, services, and testimonials.

When deciding whether to sell or rent out your home, consider factors such as the current real estate market, your financial situation, and your long-term goals for the property, as well as any potential challenges that may arise from being a landlord in your state (or country). Ultimately, the decision should be based on what makes the most sense for your individual circumstances and priorities. Even if you own a portfolio of real estate, one's home is often their biggest expense in 'keeping up with the Jones'.

Don't touch your Social Security or retirement savings

If you're starting to feel the financial crunch, it can be tempting to dip into your retirement savings or take advantage of your Social Security benefits prematurely. Unfortunately, this can backfire. You don't want to blow through your savings prematurely. Plus, if you take your retirement benefits early before the age specified by the Social Security Administration, you won't receive the full benefits. You'll only get a partial cut.

If money is tight and you do own real property, consider a reverse mortgage in taking an inventory of all your options.

Research long-term care and disability insurance options

Ideally, you'll want to be financially comfortable for retirement so as to not find yourself in a panic. However, there are some safeguards you may or may not be able to put in place, and learning all you can today is a good idea. Long-term care insurance is one option. According to Schwab, the median annual cost for assisted living is around $51,600, though that is a conservative number compared to water front states and inflation. Long-term care insurance can help cover that expense if you can get it early in qualifying for it. If you're still working, you might also consider disability insurance, in the event of unexpected injuries or illnesses that could keep you from working.

Should you require nursing home care, it’s important to get a clear understanding of what costs may or will be incurred. Research the facilities in your area (there are nearly 80 nursing homes in the Los Angeles area). Inquire about the expenses associated with the level of care you need or may need in the future, which could include round-the-clock care. Nursing homes provide more extensive levels of care than that of assisted living communities.

You don't want to spend your golden years in a mindset of stress, worry or anxiety so proper planning and education is key right now. Consider the tips above, and associated web links, to broaden your knowledge on your financial choices and real life landscape out there. By taking steps today, you can transition as smart as possible to protect your money as well as your happiness. If you can gain financial freedom and boost your security, even better.

Angelina Carleton Legacy Planning assists you to remove the enigma out of your holistic legacy planning so your legacy can be defined in your words, then developed accordingly in your time right now. Book your first consultation today!

Courtney Rosenfeld started Gig Spark to be a resource and the first step for people who are looking to join the gig economy, either to supplement their income or as a way to fulfill their dreams of becoming an entrepreneur.

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