Prioritize fitness, spend less, organize more. With the new year just around the corner, so comes the time to set some resolutions. While it’s nice to set ambitious goals for ourselves each year, the reality is that many people don’t actually follow through with them. In fact, studies show that less than 25% of people stay committed to these resolutions after just one month1—yikes. Luckily, you don’t have to be part of this statistic.
10,000 people reach retirement age every day2, so shifting your resolutions to focus on your golden years could go a long way in improving your retirement lifestyle. With healthcare costs rising, life expectancy rates increasing, and the economy being anything but certain, setting some financial resolutions now could help address the most common retirement concern—running out of money.
Consider some of the following retirement resolutions you can set for 2021.
- Make ‘Aging in Place’ Modifications to Your Home
As a homeowner, you know that when it comes to your home to-do list, there is always something. And if you plan on staying in your home well into retirement years, making some modifications now could ultimately secure your safety later—both financially and physically. Start by taking inventory of your home. Going room by room, identify any areas that could pose a challenge later on. While larger projects such as installing stair lifts and ramps certainly should not be overlooked, even the smallest of repairs or modifications can make it easier and safer for you to stay in your home and carry out everyday tasks as you age.
For instance, in the living room or den, you’ll want to make sure there is ample room to navigate, sturdy, supportive furniture, and close access to a phone in the event of an emergency. In the kitchen, you’ll want a well-lit working space, with cabinets well within reach (without the use of a stepstool) and close proximity between your most frequently used appliances. In the bedroom, be sure to keep clear, safe walkways, free from any lingering technology cords or cables. You’ll also want to consider a spacious, accessible walk-in closet, with easily reachable storage. Finally, we move on to the bathroom, the most accident-prone room in any home. Start by installing grab bars and rails in addition to non-slip floor mats and rugs. You also might consider replacing your existing shower or tub with an age-friendly, walk-in tub. Finally, consider the width of your bathroom door. Is it wide enough to accommodate mobility devices like a wheelchair or walker, should you require one?
- Create a Budget You Can Actually Stick To
It’s no secret that nobody likes to budget, but having a spending plan in place can greatly reduce your risk of running out of money in retirement. While we all like to think that spending naturally decreases in retirement years, this isn’t always the case. In fact, nearly half of today’s seniors report spending more during retirement years than they did prior to leaving the workforce. With considerably less income, you’ll need to take a proactive approach to managing your cash flow in retirement. So where do you begin?
The key to setting and actually adhering to a budget is to make it realistic. Start by looking at your purchases and spending habits over the past few months. Consider fixed expenses you’ll incur every month for essentials such as housing, food, transportation, and utilities—these are the things you really can’t go without. From there, see how much money you’re spending in other areas such as shopping, travel, or dining out with friends. Add up these expenses to get a better idea of how much you are spending, relative to the funds you have available. From there, you can set a realistic budget that will keep you within these limits and allow you to do the things you love, while still living well within your means.
- Embrace Senior Discounts
What’s the best part of reaching retirement age? Well, it depends who you ask, but many wouldn’t hesitate to say senior discounts. After all, who doesn’t like to save money? Senior discounts are available across various businesses—from hotels to department stores, supermarkets, and pharmacies. And while some businesses advertise these savings, many others keep them a lesser known secret. What’s more, not all of these discounts are limited to people age 65 and up. Even in your 50s, you may be eligible for discounts that could quickly add up. Don’t be afraid to ask!
- Establish a Plan for Long-Term Care
The price tag of today’s healthcare comes at a cost, and Medicare doesn’t cover everything. In fact, the projected lifetime expenses for a healthy 65-year-old couple now hovers around $400,0003. Perhaps the largest contributor to these costs is long-term care. With so many unknowns about the future and your health, it can be very easy to put planning for long-term care on the backburner. But with an estimated 70% of seniors age 65 and older requiring some form on long-term care in their lifetime3, it pays to be proactive.
Like all things, long-term care insurance comes at a cost. If you’re looking to fund long-term care or future healthcare expenses, a Home Equity Conversion Mortgage, also known as a reverse mortgage, could allow you to do just that. By tapping into the equity in your home, you’ll access funds to use as you wish, whether it be setting aside some cash for future medical bills or planning ahead for long-term care.
- Invest in a Healthy Lifestyle
They say that health is wealth. And since we just covered the cost of healthcare, we know just how true this is. This goes without saying, but one of the easiest ways to save money in retirement is to prioritize your health. Simple measures you can take include getting proper nutrition and maintaining an active lifestyle, both physically and socially. You’ll also want to focus on preventative care by making routine appointments with your healthcare providers so you can address any potential health issues before they escalate. Spending just a little bit of money on a healthy lifestyle and regular screenings now will not only help improve your quality of life, but could also reduce your overall healthcare costs in retirement.
- Build up Your “Rainy Day Fund”
Do you have enough money set aside to cover an unexpected expense or emergency? The reality is that many don’t—40% of Americans do not have the funds to cover a surprise $400 expense4. With this in mind, it’s imperative to make consistent contributions to an emergency fund that you can readily tap into in the event of a large, unexpected cost or delay in income.
As the biggest source of wealth for most households, tapping into your home equity can provide a welcomed source of retirement income and cash flow. And with a reverse mortgage, you can access these funds to use however you wish. From having additional cash on hand to cover everyday bills and expenses, to establishing a financial safety net to cover shifts in spending, to establishing a line of credit for emergencies or occasional expenses, or even just making larger contributions to your own “rainy day fund,” a reverse mortgage can help you fund what matters most – both now and in the future.
As we bid farewell to 2020, living out one or more of these resolutions could go a long way in improving your retirement lifestyle and financial situation. Whatever your personal resolutions for the new year may be, a reverse mortgage can help you fund them.
Unlike a traditional forward mortgage—where you must begin repaying the loan right away—reverse mortgages do not require repayment until the final borrower no longer lives in the home.
With optional monthly mortgage payments*, you can make payments as little or often as you’d like and keep more cash on hand to use as you see fit.
*Real estate taxes, homeowners insurance, and property maintenance required.