Retirees Worried About Running Out Of Money
Yahoo had an article about retirees being worried about running out of money. Much of the article was devoted to seeking out an advisor for help. Of course there were a lot of comments jumping on the idea that this was just an ad to hire an advisor. Hopefully this list can add more substance to the conversation.
1. Over reliant on limited income sources
Just relying on Social Security and accumulated savings increases the odds of running out of money. One big medical expense not covered by insurance and the plan might be blown up that quickly.
2. Create another income stream
Part time job
Monetize a hobby
Sell on Amazon
Some people can figure out how to make money blogging
Monetize an asset like renting your car our on Turo (not sure the wear and tear numbers)
There are many others
3. Create a second other income stream
4. Reduce expenses
By 65 you should be mortgage free (that's harsh but still)
Drive your car for longer
Downsize your house if the numbers make sense
Live in a cheaper foreign country for a few years and live of the rental income from your US house, allowing Social Security and your investment account to grow
5. Stay very fit
Everything related to this list is easier when you're fit, when you have endurance to do things, can run for a distance, lift heavy things and jump. Then there is money saved not paying for prescriptions.
6. Maintain optionality
Don't immediately say no to things. You don't have to say yes right away but you also don't have to say no right away either. You can always say no later.
7. Be able to roll with the punches
If this is difficult for you, that might call for some introspection, then you need to up your game here. That is harsh too but things will not always go your way.
8. Well, what about hiring an advisor?
I've been very consistent over the years that the related tasks like portfolio management, learning how Social Security works, how to withdraw money from various types of accounts and so on are learnable. These are not black box concepts but when I say learnable, there is learning to do and mistakes can be very costly.
If you have the time, interest and the inclination, go for it but be alert to when or if your time, interest or inclination ever wane and then figure something else out whether that is hiring someone or getting help from someone younger that you know who has the time, interest and the inclination.