8 Ways to Plan for a Hard-to-Afford Retirement

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Bills.com suggests ways to plan at the last minute for retirement.

For Americans worried about how to finance their retirement, free online consumer finance portal Bills.com suggests eight ways to help polish up planning for the golden years.

"Fears about how many Americans will save and pay for their retirement years are very real," said Bills.com president Ethan Ewing. "The U.S. Social Security fund may not be able to pay all promised benefits to future retirees. Even if it does, in August 2008, the average benefit paid was $994 per month. Company pensions are all but history. At the same time, U.S. financial markets are on a roller coaster ride that has dashed the balances of many workers who hope to retire in the next few years. All told, things are no better than in 2005, when the Washington Post estimated that American retirees would have $45 billion less in retirement income in the year 2031 than will be needed."

Bills.com suggests that retirees take a few steps to plan for the future:

1.    Do an honest evaluation. Comb through financial records to gain a real understanding of resources. What are or will be your Medicare benefits? Do you have long-term care insurance? What is the equity in your home? Do you own your car, and what is its condition? Do you have credit card or other debt?

2.    List goals. "If finances are a problem, traveling around the world might be out of reach," Ewing noted. "However, retirees still can find enjoyment." Will you be content sitting at home after retirement? Will you need or want to work part-time? Do you want to spend time with grandchildren? Are you planning to pursue a hobby in depth? Plot out your goals and estimate the associated costs.

3.    Work longer. Nearly one-third of Americans work into their late 60s. "If this option is a necessity for you, take heart in the fact that you are not alone," said Ewing.

4.    Eliminate debt. Debt is a tremendous crippling force. Strive to pay off debt before retirement or as soon as possible afterward. Bills.com offers a resource center for debt relief at http://www.bills.com/debt_relief/.

5.    Save, save, save. Even if it feels like it is too late, before you retire, save every penny you can. Baby boomers have, on average, less than $50,000 in retirement savings. Yet all Americans can contribute up to $15,500 annually to tax-deferred retirement plans. Individuals over age 50 can save $5,000 more in "catch-up" contributions. Get rid of any credit card debt and then pour any gift, inheritance, bonus, overtime or net from selling items into debt payment or retirement savings.

6.    Minimize expenses. Look closely at the bottom line and work to reduce costs. For example, a clotheshorse should realize that premium style may not be the No. 1 priority in retirement. Yet you can enjoy fashion -- and pinch pennies -- by shopping at consignment and thrift stores, or having a clothing swap with stylish friends. If you do not watch hundreds of premium TV channels, downgrade to a basic cable package. Instead of dining out, cook at home, host potlucks with friends or trade meals. Ask about senior discounts when shopping or going out.

7.    Consider alternatives. Brainstorm options. Be open-minded. Do you need a car? Can you share with others, use public transportation or move to a neighborhood where walking is feasible? Some seniors take roommates or purchase a new home with friends to cover costs as well as provide a social outlet. Others might sell a home and use the money to build an addition on a child's home, where the retiree can live safely and comfortably.

8.    Fill the gap. Would selling your home or applying for a reverse mortgage provide monthly income to pay the bills? Would a part-time job provide grocery money or some extra money for some fun activities? Learn more about reverse mortgages at Bills.com's reverse mortgage center.

The earlier you can evaluate your situation, the better. The sooner you minimize living costs, the longer your money will stretch. Be honest with yourself and with your loved ones, and you can polish up those golden years by making the most of your resources.

About Bills.com (http://www.bills.com)
Based in San Mateo, Calif., Bills.com is a free one-stop portal where consumers can educate themselves about complex personal finance issues and comparison shop for products and services including credit cards, debt relief assistance, insurance, mortgages and other loans. As the online portal to Freedom Financial Network, LLC, the company has served more than 40,000 customers nationwide since 2002 while managing more than $1 billion in consumer debt. Its RSS feed is available at http://www.bills.com/news_releases/.

Bills.com holds the No. 257 spot on the Inc. 500 list for 2008, and the No. 3 spot on Entrepreneur Magazine's Hot 100 list of the fastest-growing U.S. companies. Bills.com also was named a finalist as "most innovative company" in the American Business Awards in 2008. Company co-founders and co-CEOs Andrew Housser and Brad Stroh were named to the Silicon Valley/San Jose Business Journal's "40 Under 40" list in 2008, and are recipients of the Northern California Ernst & Young 2008 Entrepreneur of the Year Award.


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Aimee Bennett

Ethan Ewing
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