(WCMH) — Are you thinking ahead to a retirement of vacations and doing the things you love?
For a lot of people closing in on their retirement years, inflation is hitting those plans hard, making them rethink or at least delay their dreams.
Richard Dansereau’s home has been a labor of love.
“We refinished the floor, we put in blinds, we converted the fireplace,” he said.
But, approaching retirement, he said taxes could force him to sell his beautiful home.
“The property taxes are just spiraling out of control,” he said, after a recent tax hike based on its now-higher valuation.
Suddenly those savings are not enough.
With inflation running at 10 percent, combined with high energy prices and rising property taxes, many people approaching their retirement years are realizing they may not have saved up enough.
Suzanne Powell is a financial advisor at Meridian Wealth Management and author of the book “The Ultimate Money Moves for Women Over 50.”
“With inflation comes higher costs,” she said.
One problem, she said, is that while your income drops in retirement, often substantially, many people keep spending the same amount of money as before, especially since they have more free time.
After all, every day is now a Saturday or Sunday, which means more trips to restaurants, theaters, the mall, and home improvement stores.
“Typically the first 5 to 7 years most of my clients are spending exactly what they spent before,” she said.
So what can you do if you are facing this bind?
Powell suggests you:
- Push back retirement a year or two.
- Take fewer, and less expensive vacations, as vacationing takes up a major part of most retirees’ annual budgets.
- Consider giving less to children and grandchildren until you are sure your finances are solid.
- Take on a part-time job, which more and more retirees are now doing.
“Some of my retired clients are still working, for instance at the craft store they shop at,” she said. “I have a couple of clients who are driving for senior centers or for a car dealership.
Or you can continue working part-time at your previous job if it is possible.
Otherwise, inflation could really hurt those retirement dreams.
There’s a good lesson here for people in their 40’s and 50’s: Save as much as you can in a 401-k or IRA.
You will barely notice it, but you will thank yourself for doing that at retirement time.
That way you don’t waste your money.
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