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Easy Financial Health Fixes Before Retirement

By: Andrew Rosen

stethoscope on money

What does your doctor have to do with your financial health? While your blood pressure may not impact your investments, there is a correlation between handling your financial health just as you handle your physical health. Just as putting off checkups and routine healthcare screenings can leave you with fewer treatment options when it comes to your physical health, avoiding talking about your finances can have the same impact on your financial health.

If you start showing signs a health issue, such as a high blood pressure reading, your doctor might suggest monitoring the situation. They also might suggest making small lifestyle improvements to better your health. However, if you let this fester for years without checking, and went to the doctor, you may have a more serious situation at hand, which could include medication or surgical treatments to resolve.

The same is true for your financial health. The sooner you address and care for your financial wellness, the more apt you’ll be to retire on track and have the funds for what you have planned. Also, the sooner you address your financial issues, especially with a financial advisor, the more time you have to resolve those issues and put a plan together to reach financial wellness without resorting to a more drastic measure.

Fixing Financial Issues Early

There’s a case to be made for addressing your financial situation head-on, even when it is uncomfortable. Let’s say you’re 45 and want to retire at 65. If you haven’t saved enough for retirement, you might meet with a financial planner and discover that you still have a few options:

· You might increase your 401(k) savings by 6%-15%

· You might cut back your expenses by $1,000 per month and not change your rate of savings

· You might change your plans and work until 70 instead of 65

· You might work until 65, but then get a part time job for 10 years to cover the additional expenses

When you tackle the issue early on, you can assess the situation and work with a professional to find out what options are available and what would work best in your situation. As you can see, there are no all-or-nothing examples above and, in this example, you’re not backed into a corner. You could also choose a combination of the above examples, such as cutting back examples by half and working until 68 years of age. This is akin to addressing your medical issue early on and fixing it with lifestyle changes.

Taking Drastic Measures To Financial Health

This scenario changes though, if you wait to address your problem until you’re 62 and you’d like to retire at 65. With only 3 years until your desired retirement age, there’s not a lot of time left to assess your options and make adjustments. If you haven’t saved enough money, you simply haven’t saved enough money – you’ll have to take the most drastic measure for your financial health. In this scenario, it likely means working longer than you had intended, and downsizing what you had intended on living on in retirement. By waiting and burying your head in the sand, you’ve often missed the opportunity to fix the problem while it was an easier fix. If this was a medical example, you’ve let your high blood pressure go on for years and years without treatment, and now it can only be fixed with surgery or other high-stakes medical procedures.

Preventative Care Is Key In Retirement

Just as doctors stress the importance of preventive care in medicine, caring for your financial wellness early on is a key factor in retiring in wealth, health and happiness. The earlier you start planning for your retirement, the more options you have, and the easier it will be to make the adjustments that lead to a massive difference in living a financially health life.

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