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How To Overcome A Financial Setback And Still Have A Great Retirement

Let’s face it, the road to retirement isn’t always straightforward. Even with the best planning, many of us are likely to have to experience at least one financial setback in our life. The older we get, the more stressful if can be. financial setback can be overcomeA survey conducted by Ameriprise Financialfound that respondents aged between 50 to 70, reported experiencing at least one financial setback. More than 50% said it seriously reduced their retirement savings by an average loss of $117,000.

A financial setback can be out of your control

Unfortunately, there are some events you have no power over. A sudden job loss, divorce, ill health, disability, natural disaster, care needs of an elderly parent or the sudden death of a partner are all difficult to foresee sometimes. That doesn’t mean that you can’t plan for them.  For instance, invest in building an emergency fund to help see you through any unforeseen disasters.

A financial setback can be self-inflicted

Some financial setbacks, however, are due to our own behaviours such as procrastination in saving, overspending, stacking up credit card bills, getting into debt. For instance, due to the high cost of going to university, many parents are overborrowing to pay for their child’s higher education. As a result, the Consumer Financial Protection Bureauhas reported that the number of consumers age 60 and older paying off student loan debt has quadrupled over the last decade. However daunting it may feel to be suddenly facing a financial crisis, it’s important to remember you are not alone. Others have been through it before and there are always solutions.

Financial difficulties affect most people at some time.

Getting through a setback and bouncing back can actually make us stronger and help us realize what’s really important in life. It can be tempting to dream about improving your finances but not acting till a need arises. A setback can be the motivation you need to finally take some action. Plan, commit and just do it. You can then enter retirement feeling confident that yourself and loved ones will be protected. Here’s a short guide to help you better understand how to build your own financial resilience whilst ensuring your future retirement is protected.
    1. Save
The biggest threat to the financial security of your future retirement is not saving enough money.  You should be aiming to save around 15% of your monthly income.  Stuart Ritter, vice-presidentof T. Rowe Price Investment Services observes that “not enough people are saving enough, saving 3% for retirement is like going to the gym for 6 minutes.”  According to the Office for National Statistics (ONS), the average amount being paid into private-sector workplace pension schemes in the UK was only 4.7% of a worker’s salary.
    1. Future Health Planning
A  2014 Merrill Lynch studyfound that 70% of couples age 50+ had not discussed the possible cost of  their health care during retirement. Yet, 81% of retirees said that health was more important to them than financial security. There’s no doubt that health is one of the biggest challenges facing retirees.  50% of retirees retired earlierthan they expected, mainly due to health issues. It is vital to calculate health care costs in retirement plans to avoid future crisis.
    1. Don’t Blame Yourself   
When you experience a financial setback, don’t blame yourself. It is far better to focus your mind on solutions rather than regret. A 2017 study commissioned by theNational Endowment for Financial Educationfound that by the age of 70, a staggering 96% of Americans will experience four or more major life events like redundancy, divorce or illness resulting in a 10% drop in income. The study also reported that 60% of workers will experience a full year without earning a salary, at least once in their life. Let the past be the past, instead focus on practical steps to overcome your situation. Even if you are saving just a little bit every month, this can go a long way. It can be a first step in nudging you into creating a more robust emergency fund.
    1. Assess your situation
After experiencing a serious setback, you need to quickly assess your financial situation. This will include making an inventory of all your remaining assets, available resources, and any liabilities. Once you have a clear idea of where you are now, you can then start to design a practical plan for the journey ahead. This is a good moment to seek professional advice.
    1.   Develop a recovery plan
It’s important to gather as much information as possible about your situation to help you create a practical plan. Here are some things to include in your list:
  • Inventory of all your remaining assets.
  • Figure showing how much money you owe and what your monthly outgoings are.
  • Total figure showing interest spend on all debts e.g mortgage, credit cards, bar loans
  • Net monthly income
  • All implications of financial setback e.g. healthcare, alimony, insurance
    1. Be Smart
As part of your financial recovery strategy you need to identify what you want to achieve next and what is realistic. A good way to do this is to identify and analyze your financial goals. This should not be a wish list. For instance, if you are heavily in debt or facing bankruptcy, aiming to become a millionaire in the near future seems unrealistic.  Be specific and practical in identifying your goals.  Identify exactly how much income you need a month as a minimum, set deadlines to achieve this, then regularly evaluate your progress.
    1. Don’t Wait, Act now
Forewarned is to be forearmed. Planning ahead how you will cope with a financial setback should be part of your retirement plan. We all know things can go wrong at any time – illness, job loss, natural disaster. Prepare by making sure you have enough money saved that when faced with unexpected events you have a financial buffer. Don’t ignore your debt; instead try to pay it off as quickly as possible. This will reduce the amount of interest you end up paying and free up available cash that you can use in a future crisis.
    1. Invest in happiness
Long-term financial recovery involves rethinking spending priorities. This means making savings and cut back where possible depending on your situation.  Before you start sacrificing your entire budget, observe what things are important to keep you feeling healthy and happy. This is something that will be particularly important if you are going through a difficult situation. The US Financial Diaries, a study of the money habits of 235 families, found that an occasional financial extravagance actually makes it easier to maintain a disciplined budget longer term. Allowing yourself a few pleasures that remind you of how you want your life to be can help you emotionally recover faster from whatever adversity and financial setback you have experienced.
    1. Home Based Business
Have you considered that a home based business may provide you the combination of extra income, mental stimulation and the opportunity of creating the lifestyle you want? Laptops, mobile devices and the internet make it possible to create a strong, viable business from the comfort of your own home or wherever you choose to be in the world.  Many baby boomers are rethinking the way they want to live their lives, choosing to create a non-traditional retirement as a entrepreneur, boosting their income and enhancing their lifestyle.

Boomers Surprising Lifestyle Trends

The generation known as Baby Boomers, born between 1946 and 1964, have created new trends at every stage of their lives because of the large number of people born in that generation. Of all of the baby boomers surprising lifestyle trends the rise of boomerpreneurs has perhaps been the most significant of all. Have you noticed that many of the baby boomer generation are now choosing to combine their chosen lifestyle and leisure with income producing activities? I first became aware of this boomers surprising lifestyle trend when I began to attend internet marketing workshops to help me market my business. When I started my quest to learn about online business, about 12 years ago, there were quite a few people of the 50+ demographic but over time I’ve observed the numbers growing strongly and the success of boomerpreneurs becoming common enough to be considered a definite lifestyle trend. Older couple creating video for online businessPerhaps it was that I was so interested in this demographic professionally that I took notice initially.  Perhaps it was that I felt that I may be a little bit weird trying to be a successful entrepreneur when I was at the stage of life that friends were starting to look forward to retirement! I wondered if I was really seeing the beginning of a boomers lifestyle trend, or whether I was just imagining that others were as interested in this new way of doing business as I was. Well, weird I may have been, but I certainly wasn’t alone!  And the longer I’ve been working in this fascinating arena the more people I’ve met who have similarly embraced online business in the second half of their lives. Now that offers online business education and support I am hearing so many wonderful stories of people who have become successful entrepreneurs – boomerpreneurs – after leaving the careers that they were known for most of their lives. Technology gives us so many wonderful opportunities that were not around for previous generations. With the likelihood of living longer than people did just 20 years ago, and with the desire that most people have not to outlive their savings, it is not wonder that so many baby boomers are making their next step towards online business….and as boomers’ surprising lifestyle trends go this is a very financially prudent trend.

Early Retirement or Reinvention?

The Late Shift – Insight on SBS Australia

Screen shot from The Late Shift on Insight SBS television

Have you ever considered buying a brothel in an outback mining town at 55 years old? Would you like to still be working at 102? How about becoming a barrister when you have just been sacked as the judge on a top rating television talent show? Or becoming an entrepreneur in your 60s?

These remarkable stories, and many others, were shared on a recent Australian television show. Insight host Jenny Brockie interviewed people who, for many different reasons, are still working at a much older age than normal. She also sensitively dealt with the issue of older people finding it very difficult to find work. You can view this great program by clicking on the image above.

Questioning Traditional Retirement

With the trend of people living longer many people worldwide are questioning the paradigm of retiring at 65 and just living off their investments, doing no more income producing work for the rest of their lives.

The concept of a ‘traditional’ retirement is being challenged by many.

This idea is not new. It has always been common for successful business people to transition from full time work to becoming a director of a company with part-time involvement.  Retired professionals often become consultants within their industry and continue to work on a project basis, with blocks of full-time work alternating with blocks of full-time traditional retirement. Writing a book has long been the retirement project of people who felt they still had a contribution to make but wanted to do it in their own time, combining the lifestyle they desired with the challenge of creating a great book.

Seeking Purpose, Challenge and Meaning

People seek purpose, challenge and meaning in their lives, at all stages of their lives.  Why should this change when they hit the magical age of 60 or 65?

For many people this purpose, challenge and meaning comes from the traditional retirement life that they create; perhaps some form of community service, genealogy, pursuing a long-held interest, mastering a physical or art/craft activity or becoming actively involved in the lives of their grandchildren.

For others, this is a time of life when they decide to do the things that they couldn’t do before. How often have you heard someone say “I’ve got a great business idea but I can’t do it now” or “I’d love to work from home”. There is a spark of entrepreneur lurking in the most surprising people, and it is often when people get older that they embrace this aspect of their personality and are in the position to build a business.

Will you outlive your retirement savings?

Outliving your retirement nest egg is a fear of many people as they approach retirement age.  The reality is that living is expensive and that a large proportion of people go into retirement worried that they will not be able to afford the lifestyle that they have dreamed they would be able to live in retirement.

There is no point in worrying about it but there is a lot of point in doing something about it!

Working From Home

Technology has given us the opportunity to run a business from anywhere, with no borders, no need for staff, and no glass ceiling.  There are many people who are earning very good incomes (sometimes extraordinary incomes) working online, all around the world.  Certainly there is learning involved, but that is part of the fun and the challenge.  Just like any business venture there are no guarantees, and it is essential that you trust the right people as there are many sharks online.

Boom in number of older entrepreneurs

Older man on laptopIn the last 10 years there has been a huge 140% increase in the number of entrepreneurs aged 65 and older, according to Barclays Business in the UK. In the same period, there was an increase of 63% in the number of businesses owned by those over 55.  Surprisingly younger entrepreneurs lagged significantly behind with only an increase of 23% for the 25 – 34 years population.

Barclays has appointed the founder of a skincare company, Liz Earle, to advise on the ways that banks can better support older entrepreneurs.  In an interview with she commented

The older generation adds so much value to the workplace in any context – bringing a wealth of experience and industry contacts to the table. I’m not surprised to see so many budding entrepreneurs of my generation, but it’s great to see them taking the plunge in later life, rather than feeling it’s too late.”

She offered ten tips for people starting a business later in life which I have adapted and shared with you here.

  1. Believe in your abilities, skills and experience.  You have a lifetime of experience, skills and knowledge. Understand that you have much to offer and be confident in what you can achieve.
  2. Stay up to date and keep learning.  You must have deep contemporary understanding about the area in which you are working.
  3. Have a clear business strategy. You need to be able to articulate your big idea and how it relates to your business.
  4. Embrace technology.  Without a good understanding of what technology can do for your business and some technology skills you really can’t be in business in the 21st Century.
  5. Make your decisions slowly.  Their impact will be felt for a long time.
  6. Prioritise your health.  There is no point in being unable to enjoy the rewards of your work or being the richest person in the cemetery.
  7. Listen to your instincts.  You are probably right and even if you aren’t you will not be able to proceed smoothly if your instincts tell you something isn’t right for you.
  8. Do something that matters to you.  It may not be that you absolutely love the work you are doing.  It may be that the outcome really matters to you, or that the reason you are doing something is enough to motivate you.  Some lucky people can create a business based on something that they are passionate about. Most others get their motivation through the purpose or the outcome of their business activities and that is enough.
  9. Family comes first.  The people you love, the people who care about you, should always be a top priority. Don’t let your goals drive a wedge between you and your family.
  10. Don’t be too proud to seek help.  Look to trusted business mentors, people in your network and family members to give you some support when you need it.  Get assistance to do the jobs that you don’t enjoy doing or find difficult.
(Adapted from ‘Huge growth in older entrepreneurs: how you can join them’ by John Fitzsimons published in 21/08/2017)

Have Your Ever Wondered “What If…..”

What if...? text with image of mountains What if I had done things differently? 

What if I could do things differently now?

What if I was twenty years younger?

Are those “what if…?” questions stopping you from living a rich and full lifestyle?

Are they stopping you from following dreams, learning new skills, seeing opportunities, doing different things?

Getting older doesn’t have to mean that you give up on your dreams and seeking new challenges.

How An 85 Year Old Creates Income Online

Ultimate Retirement Breakthrough banner

Frank is 85 years old and has retired three times. " I saw that people who retired often died fast. I didn't want to die."

Frank wants to live life to the full and create an income. Watch his story here.

Press Release: Baby Boomers Solve Common Traveling Problems

In keeping with our BoomersNextStep belief that baby boomers can thrive on making career changes and should not let age stop them from following their lifestyle dreams, in the post below I proudly announced that I’ve been practicing what I preach.

I’d been searching for a way to continue to make an income once we decide to retire from our “real jobs” and were free to travel as and when we wanted to.  I started learning about Amazon selling, and this blog post was written when my first product had just been launched on Amazon.  It was a challenging, exciting, scary, inspiring, fun, frustrating, but mostly delightful journey, except for the fact that it didn’t really work out for me as I had hoped.

What went wrong?  Amazon kept changing the goal posts and I didn’t manage to keep ahead of their changes. They had a major change in the way they promoted products, and it made it more difficult for small business to compete with the big companies.  As with any business, unscrupulous people “played” the system, and in this case people were paid by bigger companies to write negative reviews about their competitors.  Another problem for me was the design of my product.  It was designed to be packed inside itself, forming a small pouch. Amazon is very lenient with their returns policy, and returned items are put back for sale if nothing seems to be wrong with them.  In the case of my product you couldn’t see anything wrong with it if it was packed back into its pouch.  Consequently when it was resold customers received damaged goods.  I’d be upset about that too.

So do I regret my venture into Amazon?  Not really.  I wish I had made more money out of it, but I learnt a lot and actually enjoyed the experience.  I think if you are venturing into unknown territory you have be prepared to be resilient and I have learnt that I am.

It is now sold out and I have closed my account but I’ll still share the Press Release with you. It was a great product and fortunately we still have a couple of bags left that we use all the time when we are traveling or going out to a festival or other day outing.

Press Release: RovEasyRovEasy Daypack

Many Baby Boomers go traveling, enjoying their freedom from child rearing or work commitments. However one Baby Boomer couple transformed their European vacation inspiration into a new travel solutions brand, RovEasy, and have recently released their first product, a lightweight backpack.

The new RovEasy daypack is designed to meet the needs of the savvy traveler. Weighing less than 6oz, the pack folds with ease into its own internal pocket in seconds, small enough to be easily transported in a handbag or coat pocket. The daypack features classic styling with high quality fabric and once open is a comfortable size for adults of all sizes to carry their daily travel necessities.

Principal of Clarity Travel Solutions, Jenni Proctor, explained “We were thoroughly enjoying our travels, but because of the changeable weather we started the day wearing jackets then needed to remove them as the temperature rose. It was inconvenient carrying jackets around all day in our arms but we didn’t want to carry a backpack on our backs all day, even when it wasn’t needed.”

RovEasy daypack folds and unfolds quickly and easily.“For convenience we bought a lightweight backpack that could be carried in my handbag or my partner’s pocket and then unfolded it when needed,” Jenni said. “It became the most useful item we had on our holiday, but we were unhappy with its quality and felt the design needed improvement so we decided to design one that would really meet our needs.”

The RovEasy daypack has just been launched on Amazon at a special introductory price. For more information please have a look at RovEasy daypack on Amazon.

Meanwhile these intrepid Baby Boomer travelers are planning their next holiday and their next product to ease the inconveniences and enhance the ease of traveling.


Study shows older people are more susceptible to malware attacks

When it comes to being exposed to malware and viruses, who do you think is more likely to fall victim – the kid who spends every waking hour online, or your grandmother who just logged onto the world wide web for the first time over the holidays? If…

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Enjoying Online Business Opportunities And Friendship

When I work with people changing their careers, or even just chat socially with people and the conversation turns to work, so many express the desire to work for themselves.  Frequently this is followed by “I’d love to create a business online and work from home.” This is a career move that is close to my heart, after all I live it every day, but I have, until now, hesitated to recommend it to people because there can be a few speed bumps on the road to online success.  I know because I think I’ve hit every one of them over the last eight or nine years! It’s been an interesting journey and along the way I have met some amazing people. Sometimes it is the people you meet that make the most unexpected impact on your life, even years later. On a cold and dismal day in London in 2010 I arrived at a business workshop after flying into the UK from Australia. I was jet lagged, excited, nervous and not quite sure what I’d let myself in for. I’d gained access to the workshop through a competition online and I think I only won because I said I’d fly from Australia to London to attend. It certainly wasn’t for the quality of the video I’d submitted! I met an interesting couple almost as soon as I arrived at the venue. Susan Beesley and her husband Chris were accountants and management consultants who were just starting to learn about internet marketing.  The workshop required quite a lot of “buddy” work, so Susan and I became “buddies” and worked closely together for some of the workshop and the three of us often chatted in the breaks. I enjoyed their company and we kept in touch over the years. Now they are highly regarded internet marketers, keynote speakers at major internet events around the world, and reaping the financial benefits of their hard work, their new skills and their ability to explain complex concepts in an interesting and understandable way. I recently met up with them again after all those years.  We had kept in touch, and in fact I’d been following their work and learning from them for several years.  They traveled to Australia to be the keynote speakers at an Online Business Education training. Chris and Susan BeesleyMy husband attended the training with me and we were most impressed by their knowledge and their stage style, which is just them being exactly who they are on stage.  That is refreshing in an age of youthful success, photoshopping and manufactured images. We also had a great time catching up socially, with lovely dinners and the occasional glass or two of bubbles!  With a common interest in creating a great lifestyle that encompasses lots of travel and embraces some work online to enhance that lifestyle, we had a lot to talk about.

Are You Considering An Online Business?

Online Business Is Here To Stay

Over the last ten years the world has moved online…business, learning, shopping, marketing, even ordering a takeaway dinner.   The advantages and convenience are obvious (most of the time) but what does it mean to you if you are considering business possibilities for yourself? 

Increasingly baby boomers are seeing an online business as a very viable alternative to seeking employment, a way of creating a business that brings in an income through your own endeavors, skills and preferred style of working. 

The thought of having to learn how to make a business succeed online can be daunting for those who can see its potential but haven’t been actively involved in how to make it happen.

Woman working on laptop computerLearning about online business

I have been working in this space for some years and have been to so many seminars, attended so many workshops, participated in so many webinars, that if I had put that effort into a PhD I’d have a completed it with honours by now!   It’s become a bit of an obsession for me I think J

By nature I’m a lifelong learner.  I love learning about new things or hearing similar ideas expressed from a different perspective.   I have been fascinated by all things to do with the internet and have watched the “normalization” of working in this space over the last few years.   Six years ago if I was attending an internet marketing workshop I would tell people I was going to a “business” workshop, which was true but was definitely putting up a smoke screen.  Why?  Because I found then that people treated internet businesses with mistrust.  I would have to explain to them it was the way business was going, and that perfectly respectable normal people like me needed to learn about it.  Now I happily proclaim my interest in blogging, social media and internet marketing to anyone. 

I’m going to be blogging about working online, particularly from the perspective of baby boomers creating an online business that uses their skills, experience and expertise while giving them new challenges and their choice of working environment.

So my big question is: 

What would you like to know about online business? 

Email me and let me know what interests you and I’ll be sure to include that in the blog posts. 

By Jenni Proctor


Achieving Your Retirement Savings Goals

Retirement Savings

Do you have the retirement savings that you had hoped for or expected to have by now? Daniel Goldstein's TED talk considers what we need to do to achieve our goals when that involves a battle between your present self and your future self.

According to the McKinsey Global Institute two out of three baby boomers will not be able to meet their anticipated retirement needs when the time comes.  He specifically speaks about retirement savings, and uses some very interesting virtual reality tools to give emotional strength to the need for current action to meet future needs.

5 Things to Keep in Mind when Working in Retirement

If you’re considering retirement, deciding whether or not you’ll need to keep working can be a difficult and confusing question. There are a number of things to Older man working on laptopconsider, but the list below should help you to make an informed decision.

1.  Consider your actual living expenses after retirement

Once you know how much you’ll need to keep your household going from month to month you can examine how much money you’ll receive in Social Securityand how much you’ll be able to draw from any investment accounts or IRAs you may have. Be sure to make your calculations based on the post-tax dollar amount to avoid a potentially serious misstep.

You’ll need to be aware that working after retirement could actually push you into a higher tax bracket, which could cause you to fall short of your monthly expenses. Determine what your tax liability will be, including your Social Security and any other income you may have, then determine how continuing to work will impact that liability.

2.  Understand how working will impact your Social Security

There are a couple of factors to be taken into account when determining whether or not working after retirement is going to impact your Social Security. It will be impacted by the age at which you retire and your income from work. If you decided to wait until you had reached fill retirement age you can earn any amount without reducing your benefits. On the other hand if you retired anytime between the age of 62 and your full retirement age, you can be penalized financially for earning more than around $15,000.

By researching the full retirement age for yourself you can discover the cap on your income. If you exceed that cap for a full year your Social Security payments will be reduced by $1 for every $2 you go over, and if it will be less than a year you will lose $1 for every $3, but the income limit is significantly higher. Use government resources to be sure that you are being given the most accurate information.

3.  Determine what the best health care option will be

Once you’ve reached age 65 you will automatically qualify for Medicare. If you’re still working you may also be paying for some private insurance through your employer, and it will be in the best interest of that insurance company to get you moved over to Medicare as soon as possible.

For many people this is a great option, but in some cases a private insurance plan will cover treatments and procedures that Medicare won’t. It is important to realize that you can keep both types of coverage, but bear in mind that you will be paying to health care premiums. Speaking with your medical provider and a representative from both of these insurers can help you to sort out the best option for your health and finances.

4.  Research how working in retirement will impact your pension

If you have a pension or a 401K plan, you’ll want to speak with the administrator of that plan to understand what effect working in retirement will have on it. While continuing to work can reduce the amount of time you’ll spend draining these funds and even increase them with added contributions, some pension plans max out at 30 years and continuing to work could lead it to stagnate or even to be reduced. On the other hand, some pensions are based on your most recent salary with the company, and if you decide to drop down to part time with the same employer to supplement your income, a large portion of your pension could disappear.

5.  Decide whether or not you’ll spend your golden years doing something you love

One of the best advantages of working in retirement is the fact that money can be a secondary goal. If you’ve planned and invested well, and if you live within your fixed means, you can choose to do something that you find interested, fulfilling, or fun, and worry less about how much it will contribute to your income.

Some people find ways to work from home, some work as consultants in their former industry, working to shape it for the better. Others endeavor to write their history or give back to their community. The most important thing to remember is that you now have the luxury of choosing how to spend your time, so why not spend it doing something that makes you happy?

Author Info:

Arlene Chandler works as a freelance writer for Suncorp, a company that provides income protection insurance for Australians.

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