Retirement is supposed to be the enjoyable years after you have finished working. It’s the perfect time to explore new hobbies and spend quality time with your family while relaxing as much as possible. Sadly, many Americans haven’t saved enough to fully enjoy retirement. 21% of working Americans today don’t save any of their yearly salaries, assumedly expecting Social Security checks to cover the costs of living without a paycheck in the future. But Social Security is facing challenges as well, and without a significant commitment to its funding, the program is at risk of drying up (although complete disbandment is highly unlikely). However, even with a lack of full funding, your retirement doesn’t have to include a return to work or living beneath your comfort level. Here are some tips for what you can do when your retirement funds are not enough.
Moving home can make use of your capital immediately.
55% of Americans own stock. As a retiree, you are likely included in this portion of the national population. You understand the value of ownership in a variety of wealth-generating commodities and probably know — with a great degree of accuracy — the value of your home. Moving can free up a massive chunk of your overall capital that can be reinvested in a high yield index fund or bond scheme in order to generate additional wealth to propel you through your retirement. You can even reserve storage units for free in anticipation of moving your belongings after a real estate sale. Alternatively, a new mortgage loan can extract capital from your property without the need to sell, offering a lifeline for those struggling to budget with these new cash flow restrictions.
Sell your life insurance settlement to create an immediate cash infusion.
Another great way to free up capital is to sell your life insurance policy. American Life Fund viaticals are programs that buy life insurance policies before their expiration (your death), giving you cash that you can use today. The vast majority of life insurance policies lapse due to a lack of continued payments or through a loophole in the contract that allows a life insurance company to dispute the payout for some seemingly frivolous reason. Instead of leaving your life insurance policy for your children to fight the insurance company over, take advantage of the capital it has generated now by selling it through a viatical settlement.
Viatical payouts do not give you the entire settlement amount but typically range in the 70% region. This is something you should speak with your broker about in order to get the best possible terms that fit your budget and needs. These funds can be used to cover anything from emergency medical bills to the monthly electricity charge that makes up a large portion of your now limited fixed expenses.
Retirement is all about cash flow, so a major influx of capital that can be used for an investment opportunity that returns healthy dividends could be just the lifeline you need. Moving your capital into a more usable form is the challenge faced by many retirees living on a fixed income from their collective benefits. Adding cash to your personal savings gives you the freedom to splurge one month and save the next. It gives you greater freedom to buy your grandchildren lunch without having to look at your checking account first, or take that dream vacation you have always wanted to go on. Instead of relying on your government-funded benefits, take advantage of the capital streams you have worked all your life to develop and tap into your most valuable assets. Take full advantage of your retirement and explore your options for accessing your cash assets.