The Best Budgeting Strategies for People Nearing Retirement
By: Geoff Williams Publish: November 18, 2013http://money.usnews.com/money/personal-finance/articles/2013/11/18/the-best-budgeting-strategies-for-people-nearing-retirement
Summary:
A couple ages 59 and 60 were looking forward to their early retirement before the great recession hit. Both were hard working and earn a goof bit of money and invested a large portion of their savings into their 401K and stocks. The husband sold his company and went into semi-retirement and the wife left her job to pursue he hobby of breeding terriers. Life was comfortable. But in a few years they watched as their savings were dwindling down to nothing. They know the dream of early retirement was far out of their reach at this point. The couple decided to start up a business to help their retirement. The wife became a veterinary assistant, an animal behaviorist and a professional dog trainer. The couple decided to open up a dog park, training and grooming center. Their business generates income for them and continues to do so until they decided to sell or whatever but some months its making a profit, loss or just breaking even. Based on this story here is a couple tips based on this couples experience for those newly retired or nearing retirement. First is to look at your investments if you have any and if so shift them to more conservative investments this will supply a fairly reliable steady stream of income. Second is to hold off on collecting your social security benefits if possible, this will generate more money when you do collect and you can get more out of it. It'll maximize income. If your married also try to hold back from receiving your social security benefits, by holding off you maximize your and your partner's benefits. Third you should plan to get sick, which may not sound good but this way you can be prepared by purchasing long term health insurance. Benefits are all different, be sure you find the one that is best fit for you.
Opinion:
I feel horrible for these people but the economy is never a for sure thing. It's really good that they are making their experience into a way to help others by getting their story out there. They mentioned that their business's income changes which shows that their business is elastic. They probably should have tried to enter a more certain market. I think that the tips provided are good ones. Investments shouldn't be as risky if your retirement is riding on them. One must consider the opportunity cost of holding off on collecting their benefits. You could have the money right away but then you won't maximize what you get out of it. this article really brings up some good points and I thing everyone should really weight the benefits of each one of their options before moving forward with whatever they choose.
I think that this couple probably has a few good points, however I would not go so far as to feel bad for them. If the husband owned a business, then he was probably making a fairly good amount of money. He then sold it which should have made him a lot of money so they must have squandered their money pretty fast based on this timeline.
ReplyDeleteWhat most people don't understand is the timing of opening a business. If you open a business right now and ask retail price for something, you'll be shut down in a month simply due to the reason of people not having a lot of luxury cash. If you were smart, you'd open up a discount store, such as the dollar store, at this time to make a decent revenue.
ReplyDeleteI know what Will is saying but I agree with Cody. There are many factors that go into opening and running your own business. Something as simple as the time, like Cody said can determine weather you close or stay open. Another thing is it is very easy to be making a loss instead of a profit.
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