Overcoming Financial Challenges

Let’s talk about change. The economic downturn created a new retirement reality. Many of us are going to have to work longer to meet our financial needs. For some people, that’s fine. Many baby boomers don’t see themselves retiring at all. Some prefer to transition to more of a work/life balance. However, there are still some of us who want time to go fishing. During the recession Americans experienced an unprecedented loss of wealth. It will take time to recover from losses. This means that many of us will have to work into our 70’s. The good news is that if any generation can do it, Baby Boomers can.   Our average life expectancy is roughly 80 years of age, giving us the cushion to recuperate some of our losses. That being said, we have acquired new financial obligations, which will challenge our fiscal fitness. Our children are struggling and many of us are trying to support them as they face a difficult job market. Also, we have to contend with a volatile stock market and economic aspects such as inflation. One of the more important challenges to embrace is the role Social Security plays in our future. The program has ALWAYS been intended to offer supplemental income throughout retirement. This is meant to aid us, not support us. Therefore we have to increase our personal and retirement savings. Now, that’s easier said than done. Personal savings rates are at 5%, well below the recommended 10% of your net income. This is attributed to wage depreciation, underemployment, and an overall stagnant economy. But, things will get better. And when they do, we have to remain aware of just how bad things were. It’s easy for us to get back into our spending habits, but this economy is a teachable moment. We’ve all had to tighten our belts and look at our finances differently. We have the opportunity, as the economy recovers, to place a serious focus on wealth creation – provided we make informed financial decisions. This means taking on less debt and putting more money into savings.

Debt is something far too many of us struggle with. Heck, even the government struggles with debt. For every one dollar the government spends, $0.40 of that is borrowed. Now just imagine that in your own house. What if you had to borrow $0.40 out of every dollar you spent? How could you survive? Credit card debt stands at over $750 billion. The housing market is still recovering and many of us are holding homes now worth less than we owe on our mortgages. Additionally, millions of Americans struggle with student loan debt. It can feel like the world is crashing around us, but it doesn’t have to be that way. There are many support mechanisms in place to help you out. If you are dealing with high levels of stress because of credit cards, student loans, or mortgages, you can contact nonprofit agencies that can give you advice and connect you to resources. You can also contact a housing counseling agency in your neighborhood that can help you determine ways to deal with your mortgage. And if you’re struggling with student loan debt, contact your loan servicer and work with them to identify applicable repayment programs. There is support out there. Use it. Contributions to this press release were provided by the Society for Financial Awareness.