What To Do If You’ve Retired Without Savings
Posted by Ocean Wealth
Imagine working your entire adult life only to reach the end of the tunnel with zero savings. You spent money frivolously throughout your working life or, worse still, you worked pay cheque to pay cheque, and you've reached a point where it comes back to haunt you. Unfortunately, this is a reality for many working professionals who enter retirement with no savings.
In the United States, for example, almost half of Americans have less than $10,000 set aside for their later years. That is terrifying when you think about it. On paper, $10,000 might seem like a lot for someone saving towards a singular purchase, however, it’s almost nothing when you consider it as someone’s lifetime savings from many years of working.
To be blunt, retiring without savings is ugly. Financial planning and retirement planning are two things you can’t go without, even if you live a frugal life. For people who want to enjoy their golden years after retirement, having no savings will put a significant dent in your quality of life. You may never get the opportunity to take that vacation to the Bahamas or visit your grandchildren in another country. So listen up, because we’re here to break down what you can do if you’ve retired without any savings.
Selling Off Assets
Nobody wants to willingly sell off their assets. It’s not a heartwarming charitable process. It’s something you do when you have no other options and need to generate more income because your retirement planning was nonexistent.
With all that in mind, if you’re in a financial crunch in retirement, selling your assets is a good place to start. Any kind of physical assets you own such as homes, cars, and jewelry are all fair game. You should take stock of all your physical assets to determine which things are valuable enough to sell. It might be a vintage car that you don’t need at the moment and could make you a little extra money by selling it off.
If you have any existing investments, this would also be the time to look into those. Any kind of pension funds or cash savings are good to take note of. Figure out how much money is in these investments and apply it to your retirement funds.
This one might seem like a bit of a no-brainer because it is. Reducing spending is the very first thing that should come to mind when you have no retirement savings. In order to stay afloat financially, you need to cut out any extra spending that’s not necessary.
Look into extracurricular activities where your money might be going. Things like special club memberships or eating out are common examples. Keeping up appearances should be the last thing on your mind when you haven’t done any financial planning for retirement. Assess the extracurricular activities in your life and get rid of them if they’re costing a significant amount of money every month. The sooner, the better, too.
If you’re still spending a lot of money on a home or car, you might have to consider downsizing. You might still have a big house, and it’s only you and your partner who live in it. If so, this is a good opportunity to think about an apartment or condo. It doesn’t have to be a complete drop in your quality of life but a way to save some money by living in a smaller home.
Additional Income Streams
In the direst of scenarios, retiring without any savings may force a return to work. It may not be in a full-time capacity, but you still need to make some money to stay afloat.
A lot of people still work part-time past 65, and while it might not be an ideal situation for you to be in, it may be necessary. If you’re finding that to be the case, retail is always a great industry to get involved in because of holiday hiring and flexible schedules. Depending on your savings, you may not need a full-on return to work but a few days of work here and there.
You can also make investments that, while riskier, can prove to be lucrative. That said, these decisions are always best made under the careful guidance of a seasoned financial advisor who can help.
Avoid retiring without savings and take the first step with some financial planning. Our trusted team of advisors can help you make informed financial planning decisions for your future outside of the workforce. Contact us today!