Financial Tips for Retirees in Today’s Economy

Created by:

• Pam Atkinson, MS– Consumer Economics Educator serving Livingston,

McLean and Woodford Counties• Sasha Grabenstetter, MS, AFC®– Consumer Economics Educator serving Will, Grundy

and Kankakee Counties• Kathy Sweedler, MS– Consumer Economics Educator serving Champaign,

Ford, Iroquois, and Vermillion

This webinar is presented by

Sasha Grabenstetter, AFC® • Consumer Economics

Educator• Serving Grundy, Kankakee,

and Will Counties…

Disclaimer

• This program is for educational purposes only

• This webinar was created in 2015 and some things may have changed if you are viewing it after 2015.0

What’s the age of the oldest person you have known?

6050 70 80 90 100 110+

Overview of Topics• Know Your Annual Income• Calculate Your Net Worth• Use Your Retirement as a Paycheck• Use Financial Power Wisely• Manage Your Debt• Manage Risk – Proactive Protection

Know Your Annual IncomeGuaranteed/Fixed sources:Social Security $Pension $Annuity Payments $Variable sources: Distributions from IRAs and employer retirement plans

$

Interest, dividends and sales of investments in taxable accounts

$

Earned Income $Other $Total $

Know Your Annual Income

• Estimate your monthly income

Calculate Your Net Worth

Use Your Retirement as a Paycheck

Your Retirement Paycheck

Figure your fixed and variable expenses

Include savings for emergencies and travel

Don’t forget taxes!

Your Retirement Paycheck

Continue as if you were working:– Create and stick to a budget– Pay your savings (emergencies etc.) first– Spend less than you “earn”

Use Financial Power Wisely

Do you plan to leave money for your children to inherit?

Values and Goals Affect Our Decisions

Do you agree or disagree?

• Gloria: “In a nutshell, my husband and I earned it, and we’re spending it!”

• Carol: “I am very frugal with my money. It’s important to me that I have money left when I die so that each of my four children will inherit a substantial amount. “

• Joy: “I plan to give money to my children each year during my retirement. That way they don’t have to wait until I die to receive their inheritance.”

Tough Decisions – Be Savvy!

• Carefully consider risk before co-signing a loan• Watch for scams and frauds, especially those

marketed to seniors• When making any major decision– Sleep on it– Get a second opinion– Investigate

http://web.extension.uiuc.edu/financialpro/

Manage Your Debt

Aggressively Manage Debt

Pay off credit cards every month

Aggressively Manage Debt

If you must carry a balance–do so on the card with the lowest interest

rate– and for the shortest time possible

Aggressively Manage Debt

If you continually carry a balance– look at what you are charging• Living expenses? Recreation? Travel?

Rework budget to accommodate expenses

– Cut expenses where possible

Mortgages

• Many experts still advise to pay off mortgage before retirement

• Housing is generally the largest fixes expense– Takes the larges chunk of

your retirement paycheck.

Mortgage

• Keeping a mortgage may have cash flow and tax benefits– check with a financial planner

• Equity in a paid off mortgage can be used if necessary– Lines of credit/Reverse mortgages– but be careful of terms

Auto/Vehicle Loans

• Some experts say to pay off car loans and drive it as long as possible

• If you need a new vehicle check out costs to own and drive and choose accordingly– Bankrate.com for costs to drive per state– AAA.com for costs to drive per mile by vehicle type

Auto/Vehicle Loans

• If you do purchase a new vehicle check out payment options– Paying cash-from retirement funds– Auto loan– Home equity loan-may have lower interest and

interest may be deductibleCheck with a financial professional to see which option works best for you.

Managing Risk

Proactive Protection“Managing Risk”

• Use insurance to protect against the “big bad things”

• Have the proper documents in place

• Take care of yourself – “Self-Care”

Proactive Protection Checklist

Summary• Calculate annual and monthly income• Use net worth as picture of your

finances• Manage resources by creating a

“retirement paycheck”• Make wise financial decisions about

assets• Limit debt costs, and• Be proactive about managing risk

Visit us on our blog or Facebook!

www.RetireWell.uiuc.eduwww.facebook.com/PlanWellRetireWell