The COVID-19 emergency poses a litany of health and economic challenges for many individuals, including those near retirement age.
If you were recently laid off due to this pandemic, chances are that your financial planning hit a sudden and unexpected wall.
In April alone, some 20.5 million Americans lost their jobs as overall unemployment leaped to nearly 15 percent, the highest rate since the Great Depression.
According to the AARP Public Policy Institute, individuals over the age of 55 were no less impacted by the economic upheaval.
If you were among them, and your retirement masterplan suffered a setback, here are five things you can do to help retake your well-deserved retirement plan back into your hands.
File for unemployment
The federal government enacted the CARES Act, which is designed to provide relief to all sectors of American life.
While self-employed and those within the gig economy are not typically eligible, they too can receive some of the aid, including an extra13 weeks of state unemployment benefits.
Broaden your job search
If you’ve been looking for a new job in a sector you’re familiar with, it’s time to expand your horizons.
Experts recommend a part-time job or a side gig to help fill in the financial gaps.
A part-time job will not be indicative of incomplete retirement planning. Truth is, many people are not ready for retirement until the age of 62. So do not be ashamed if you must take on a part-time job in the interim.
Hold off on Social Security
As tempting as it may be to tap into Social Security benefits early, it’s advisable to hold off.
There’s a good reason to wait. Payments will be about 7.5 percent less for every year you get early payments and 8 percent more for every year you wait through the age of 70.
Filing at 62 means getting a quarter and a third less in monthly payments than if you had waited until full eligibility.
During the COVID-10 pandemic, it may be a little easier to cut costs, especially if you no longer commute to work and have to worry about eating outside your home.
Gym memberships, movie tickets, and other discretionary spending should also be down and save you money.
You can look for other ways to cut costs, as well.
For those struggling to pay necessary bills, such as utilities and rent or mortgage, know that you can work with banks and landlords to soften the pain.
Home Equity Conversion Mortgage
New retirees can turn to a Home Equity Conversion Mortgage to immediately boost incoming income, increase buying power, and retain liquidity.
This form of mortgage requires about a 50 percent commitment; in return, the borrower will no longer make monthly mortgage payments on the home.
In exchange, the lender will offer financial incentives in the form of monthly payments, a lump sum, or a line of credit.
Please contact me today to learn more about this opportunity to boost your income and eliminate monthly mortgage payments so you can make the most of your much-deserved retirement life.
*(1) at the conclusion of a reverse mortgage, the borrower must repay the loan and may have to sell the home or repay the loan from other proceeds; (2) charges will be assessed with the loan, including an origination fee, closing costs, mortgage insurance premiums and servicing fees; (3) the loan balance grows over time and interest is charged on the outstanding balance; (4) the borrower remains responsible for property taxes, hazard insurance and home maintenance, and failure to pay these amounts may result in the loss of the home; and (5) interest on a reverse mortgage is not tax-deductible until the borrower makes partial or full re-payment. This material is not from HUD or FHA and has not been approved by HUD or any government agency.