The retirement system is facing some tremendous challenges. There are many reasons that future retirees are going to need to be concerned:
- Uncertainty in the stock market recently caused the pension system to hit a 10-year low.
- People are living older than they used to be. This is putting a strain on the system. Unfortunately, it wasn’t structured to pay for people to such an old age.
- More people have started retiring during the pandemic, which has meant that pension systems had to pay for more people than they expected.
- The birth rate has been falling, which leaves a lower base of future taxpayers relative to retirees.
- Governments are expanding the breadth of services they offer, which means that certain services are underfunded. Unfortunately, the pension system is often one of the casualties.
- Prolonged economic stagnation has taken its toll on incomes and property values. This has meant that payroll taxes, property taxes and other sources of government revenue have failed to keep up with growing funding needs.
There are many major reasons that the pension system is facing a significant crisis. Unfortunately, as an individual senior, there is not much you can do about the state of affairs. However, there are things that you can do to respond to avoid personal financial issues.
You are going to have to budget carefully and take advantage of various money-saving opportunities to get by. This is going to be very important if your pension income is not going to keep up with inflation or might get cut in the future. You might need to be creative and learn what steps you can take to change the problems that you are facing.
Here are some ideas that you might want to consider.
Take out a reverse mortgage.
Reverse mortgages are beneficial types of loans that can help struggling seniors get through retirement. You can see how much money you can get with a reverse mortgage by using a calculator like this https://reverse.mortgage/calculator.
When you take out a reverse mortgage, you will receive money based on the equity of your home. You will not have to repay this loan unless you die, no longer live in the home as your primary residence, stop paying property taxes or fail to keep paying your homeowners insurance.
This can be a great opportunity if you have fully paid off your home. You’re going to want to make sure that you plan to stay in it for the duration of your life, though. You also have to make sure that your children or other areas understand the implications of your reverse mortgage loan.
Take full advantage of all senior deals available to you.
There are a lot of companies that offer deals for seniors. Clark Howard created a list of some that you might want to consider taking advantage of:
- Goodwill offers a 10% discount to seniors over the age of 60 on Tuesday.
- Kohl’s offers a 15% discount to seniors over 60 on Wednesdays.
- Michaels offers a 10% discount to seniors over the age of 55 every day of the week.
- Pep Boys also offers a 10% discount to anybody over 55 Sunday through Saturday.
- Rite Aid offers a 20% discount to seniors over the age of 65 on Wednesdays once a month.
- Walgreens offers a discount between 20% and 30% to seniors over the age of 55 once a month.
You were going to want to learn more about the different deals offered to seniors in your area. You will be able to stretch your budget a lot further, which might be necessary if your pension income is lower than you would hope.
Consider working to a later age.
One of the unfortunate realities of the current pension crisis is that some people will likely have to work longer than they would like. You might have to work until full retirement age to get the most of your Social Security and earn a higher pension. You will also need to consider putting more money aside for supplemental retirement options like a 401(k) or IRA.
Look for supplemental streams of income during retirement.
He might also want to consider getting other sources of income during retirement. For example, you could consider turning to freelance writing, babysitting, selling old collectibles, taking on a second job or participating in online surveys.
There are a lot of different ways to earn supplemental income. You should make sure that you explore these options.