Seven Simple Steps to Not Outlive Your Money.

Black & white retro photo of man in suit and hat clinging to multiple bills in his hand and pockets.

Hey, Boomer!  Thanks for subscribing.  Here are seven simple–but powerful–steps to help ensure you don’t outlive your money.  Ready?

#1. Avoid those looking for a purse. 

Beware of predators looking for you to finance their retirement.  When you retire, your friends and your life change.  

nurse with coin purse and stethoscope

Avoid those looking to you to finance their retirement. They’re predators.

Sometimes your spouse even changes.

Boomers are divorcing and remarrying in record numbers.  Between 1990 and 2010, the divorce rate for Boomers doubled.  Yet, two-thirds will remarry or already have.

These data suggest you might find yourself in the remarriage market — or making new friends at the very least.

Caution!

There’s not enough time or compound interest to re-earn all the money you’ve plowed into your nest egg.

Avoid those looking for a purse.   They’re predators.

Have fun!  Fall in love. Be giddy, and witty, and wise.

But mostly, Boomer, be wise.

#2. Turn your hobbies into cash.

Boomer chef garnishing plate

There are lots of unconventional ways to turn your hobbies into cash. Plenty of Boomers have found out how.

Boomers are profiting from their hobbies and supplementing their income.

People I know are:

  • working as certified personal home chefs;
  • selling jewelry, art, and crafts at week-end festivals;
  • teaching group exercise classes tailored to Boomers;
  • working as personal trainers; and
  • sharing their home through Airbnb rentals.

No appeal?

Then take a look at the ideas offered by the folks at Krazy Koupon Lady.  These include:

  • selling photographs to places like Foap;
  • selling sewing and quilting on Etsy;
  • selling refurbished and refinished furniture on Craigslist; and
  • buying cars at auction for pennies on the dollar and then flipping them for a handsome profit.

Give it a try!  You never know where it might lead.

#3. Empower your adult children while improving your finances.

man in tuxedo smoking cigar

Research shows that adult children receiving financial “help” from their parents have lower salaries and net worths than do those adult children who’re the same age, in the same profession, and who don’t receive such “help.” Be brave, gentle Boomer. Cut the cord. Save your retirement.

Boomer, you’ve always wanted the best for your kids.  Both when they were little and now that they’re adults.

Sixty-one percent of Americans provide financial assistance to their adult children.  Eighty-nine percent enjoy doing so.

You mean well, Boomer, but you’re hurting your kids.  You’re not doing yourself any favors either.

Georgia State researchers Thomas Stanley and William Danko chronicle the harmful effects of providing financial aid to your adult children.

They found that professionals in their early forties to mid-fifties, who routinely received financial aid from their parents, had smaller net-worths and lower salaries than did those who did not receive such “help.”

For example, accountants receiving money from their parents had only 57% of the net worth of accountants the same age who received no money from their parents.  Their salaries were only 78% as high as their cohorts who didn’t have parental financial “help.”  Except for [secondary] school teachers, these results held for a wide variety of occupations assumed by adult children.

Listen, well-meaning Boomer:  The research says your turning your adult children into underachievers.

And what about you?

All it would take is a health crisis or an unexpected crash in the financial or housing markets for your finances to take a major hit.  An unexpected weather event—like a flood, hurricane, earthquake, or wildfire–can instantly sabotage your retirement.

Recovery from these events typically takes a while.  (Think of the housing crisis that precipitated the Great Recession.)

Before you know it, you’re destined to run out of money 10-15 years earlier than you’d planned.  It happens!.

Be brave, gentle Boomer.  Empower your kids.

Cut the cord.

Invest in your retirement.

#4. Be cautious when watching HGTV. Seriously!

woman watching vintage TV in the dark

Be careful watching HGTV. Before you know it, you too are wanting to re-landscape, renovate, or leave your perfectly good home for another with a higher price tag.

Boomer, we’re practically hard-wired to keep up with the Joneses.  And what better way to do it than to invite them into our homes every day via HGTV.

Social comparison theory states that we determine our own worth by seeing how we stack up against “others.”

Others would be the Joneses.

The Joneses do amazing renovations, plant killer landscaping, and buy fabulous homes all over the world.

Before you know it, you too are wanting to re-landscape, renovate, or leave your perfectly good home for another with a higher price tag.

Don’t do it, Boomer!

Research out of Georgia State University shows that most millionaires live in decidedly middle-class neighborhoods.  Even one of the world’s richest men, Warren Buffett, lives in the same home he bought in 1957.  He lives in an Omaha neighborhood, which relative to his wealth, is modest.

Enjoy HGTV.  Live vicariously.  Marvel at the creativity.  But avoid the temptations it offers.

Just say no.

#5. Turn your home equity into cash with a reverse mortgage.

Money house on a white background

Convert 50%, or up to $625,000, of the equity in your primary residence into cash.

If you are at least 62 and own your own home, you may be eligible for a reverse mortgage.  These mortgages allow you to convert roughly 50% of the equity in your primary residence into cash, paying you up to $822,375.

The term “reverse mortgage” is used because the lender pays you, the homeowner, rather than the other way around.

When you leave the home, either voluntarily or through death, the loan is due in full, along with all accrued interest.

(Caution:  if you’re married, make sure the loan isn’t due until the surviving spouse voluntarily leaves or dies while in the home.)  Typically, the loan is repaid by your heirs when they sell the home.

Here’s a calculator to help you figure out how much you might be able to get.

And here’s a useful fact sheet with several links on reverse mortgages.

#6. Retire to a state with a low cost of living. 

You may find that your money goes quite a bit further if you retire to one of the country’s most affordable states.  The good folks over at WalletHub.com ranked each state according to its affordability, quality of life, and health care.

Here are the top ten most affordable retirement states.

  1. Florida
  2. Colorado
  3. Delaware
  4. Virginia
  5. North Dakota
  6. Montana
  7. Idaho
  8. Utah
  9. Minnesota
  10. New Hampshire

Consider retiring to one of these states to stretch your retirement dollar.  Your cash may be poised to stretch further than you think.

(Note:  As economic indicators fluctuate through the year, WalletHub.com simultaneously tweaks these top ten states.  The states shown above were accurate at press time.)

#7. Track your money!

Man in suit looking through magnifying glass

Not knowing where your money goes is as lethal to your retirement as it is to any business.

Boomer, can you imagine a company that never tracks how much money it spends each month?  How long would that company remain solvent?  Not long.

The same is true of you, grasshopper.

Test yourself on how well you’re doing.  Look at last month.  How much money came in?  How much went out?

It’s ok.  You can cheat.  Take a peek at your financial statements—checking, debit, and credit.  Can you account for all the money spent?

Yes?

Bravo vectorBravo, Boomer!  See you next time.   And thanks again for subscribing.

What?!!

You say you’re unsure where it all went? Ah!  Then let’s track it.  It belongs in the “slipped through my fingers” category.

Bummer.

Boomer, let me say this as gently as I can:  Not knowing where your money goes is as lethal to your retirement as it is to any business. 

You’re better than this, Boomer.  Be the chief executive of your financial life.  Track your money.  Figure out where you can cut the fluff.  Start saving for your future.  Track your expenses like your golden years depend on it.

Because, Boomer, they do. 

Thanks for subscribing.

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