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The recent volatility in the market is unsettling for everyone, but the repercussions for retirees and those who are close to retirement are much more dire because of the obvious time constraints. If you are in your sixties are older, you are likely facing some difficult financial decisions going forward, but panicking or taking extreme measures is not the solution. Here are three simple planning ideas that can make a big difference…
1. Downshift your lifestyle. Even in a stable market, it makes sense to lower your overhead before you retire so that you can boost your savings. Your biggest expense, of course, is your home. By moving into a smaller place, you’ll cut back on overall living expenses (insurance, utilities, taxes, maintenance) and as well as reduce stress if the new home requires less upkeep.
2. Downshift your career. Rather than leaving the work force entirely, try to maintain a part-time position. If the hours are flexible and don’t require that you commute during rush hour, you’ll save time, money and wear and tear but still have income.One way to get your employer to cooperate is to offer to fill in during busy seasonal periods, or for employees who are out on vacation, maternity leave or on disability.
3. Adjust your investments The key is to make sure that your portfolio is structured to provide a steady stream of monthly income, regardless of market conditions. As always, the factors to consider in choosing income earning investments are safety, liquidity, terms, yield, taxes and performance history. A Certified Financial Planner can provide expert guidance in helping you determine which ones make the most sense for you.
What I Know That You Might Not

Q. I recently retired and worry that with the huge economic mess we’re in, we could go down with the ship. Is there any thing out there that you think is a good life boat? I’m 66 and my wife is 62.
H.G. Hicksville, New York

A. The problem is everyone wants a lifeboat but not at the expense of it being a turbulent ride to shore. The best lifeboat is taking measures to cut back on an indulgent lifestyle, which nobody wants to do. Who wants to deny themselves the social life they’ve created, the vacations, the second homes and boats, the big HD televisions? The truth is that in these uncertain times, it is imperative NOT to be in denial. You simply must make the hard decisions to cut back on your discretionary expenses, reduce your credit card debt (or at least stop adding to it), but this is the most crucial mistake people make. In order not to miss a beat, they borrow from their 401ks, they max out on their credit lines, sell off investments into the declining market, getting less than fair market value at a time when they need every dollar for retirement– and they discover too late that they no longer have the time or the earning power to replace the assets that they depleted. The only way to survive in a downturn like the one we’re experiencing is to be brutally honest with yourself and your family and say, this is going to hurt, but in the end, if we make these necessary changes, it will at least give you a chance for real survival.

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Tags: financial advisor, financial planning, lee rosenberg, lifestyle changes, markets, stock market

About the Author: Lee Rosenberg is the Co-founder of ARS Financial Services, Inc. As a Certified Financial Planner with more than 34 years of solid financial expertise. Lee is a registered representative of Cadaret, Grant & Co., Inc. He was also named one of the top 25 Independent Financial Advisers in the US by Rep magazine.

This entry was posted on Wednesday, October 8th, 2008 at 11:35 am and is filed under Personal Finance. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.