Developing healthy eating habits means you’ll lose weight, feel better and (generally speaking) live longer. If you adopt better exercise habits, you’ll improve your energy level as you age and hopefully minimize the adverse effects of growing older – at least for a while. Most of us know the benefits of diet and exercise. But too many seniors heading into retirement forget the importance of putting themselves on a financial diet, trimming wasteful spending in order to get themselves better prepared economically for what lies ahead.  That’s why we wanted to share this article that just appeared on the Kiplinger website, titled “Put Yourself on a Financial Diet Now for a Happier Retirement Later.”  As the subtitle states, “Developing some healthy financial habits now can help set you up for a secure retirement. And it may even let you retire sooner than you thought possible.”

The article was written by Pennsylvania-based financial planner David Hickey, and it makes some good points as far as it goes.  The bottom line, Hickey emphasizes, is that while many seniors worry that their nest egg may prove insufficient to last through their retirement years, they often place more emphasis on the money coming in than on the spending going out.  As Hickey writes, “for many people, [excess spending] can be a huge factor in the success or failure of their retirement plan. They’ve built up a lifestyle of consumption, and when they retire, they usually don’t plan to change things much. Indeed, many expect to travel more, renovate the kitchen, move to a warmer climate or take up a new hobby. And those things cost money.”

Here at AgingOptions we’ve seen this scenario played out hundreds if not thousands of times. Inadequate savings coupled with insufficient discipline, all made worse by the lack of a coherent and comprehensive retirement plan, is indeed a recipe for retirement catastrophe.

Of course, Kiplinger columnist David Hickey is just one of many voices warning seniors about the dangers of careless spending and excessive debt. This article we just discovered on a website called New Retirement says much the same thing. “Of all of the strategies that retirees can employ while arranging their finances for retirement,” the article states, “eliminating debt is among the most important. Almost all financial planners agree that carrying debt into retirement is a very dangerous move, one that can imperil your financial future and drain your retirement savings.” It’s foolish and even dangerous for seniors, especially those on fixed incomes dependent largely on Social Security, to waste urgently-needed funds on interest, fees, and other charges tied to debt. Even worse, some types of indebtedness bring the danger of rising interest rates, such as an adjustable rate mortgage, or ARM. If rates go up even slightly, the strain on a retiree’s already-stretched budget could reach the breaking point.  The New Retirement article calls it “very important to consider eliminating, altering, or reducing your debt, whether you are preparing for retirement or already retired.”

In the Kiplinger article, financial planner David Hickey suggests some strategies to pare down your spending. His argument is compelling: you might even be able to retire sooner than planned if you put yourself on a financial diet. Here are some of Hickey’s ideas to cut spending.

• Dump your debt. We mentioned this above but it bears repeating. Some planners advise that it’s fine to keep a modest mortgage in retirement, although we have our doubts. But as Hickey warns, “just about anything else — especially credit card debt — is going to be financed at a high rate. And the money you take out of your income to service that debt could hinder you from achieving your financial goals.”
• Ditch your kids’ debts, too. Are you still paying on your kids’ student loans? They may be out of the house and on their own, possibly even financially more stable than mom and dad! It’s probably time for a family conference. “Frequently,” Hickey suggests, “the kids don’t even realize their parents are still shouldering that burden and would be fine with taking over the responsibility for the payments themselves.”
• Don’t be lazy. This is pretty basic stuff straight from “Budgeting 101.” Don’t go grocery shopping without a list. Cook at home instead of eating out. Control your Starbucks habit. Hickey even suggests getting a library card so you can borrow books instead of buying them online (and, we might add, most libraries have a great selection of DVD’s so you maybe you can cancel Netflix and Hulu). Many times saving cash starts with better planning.
• Trade today’s luxuries for tomorrow’s contentment. Whether it means buying a cheaper car, taking a local vacation or making the clothes last a bit longer, if you get creative you’ll find it’s possible to save on everyday spending – and it can become a fun challenge, too. You’ll discover plenty of other ideas online at just about any “simple living” website.

Hickey is right about one thing: “You can make some cuts now, on your own terms, or make them later because you have to,” he says. “I can tell you this from experience, though: The folks who are really happy in retirement are the ones who have figured out what it costs to live comfortably, and they know they have those expenses covered.” This is why a solid financial plan is certainly very important for someone preparing for retirement. However – and we can’t over-emphasize this point – a financial plan by itself is completely insufficient.  The only way for you to ensure that you’ll enjoy the retirement you want is by planning comprehensively, and that means you need a LifePlan from AgingOptions.

Only our LifePlanning approach blends financial planning with legal protection, medical coverage, housing plans and family communication, so that all the “retirement gears” mesh properly. This interdependent approach to retirement helps you protect your assets, avoid becoming a burden to your loved ones, and escape the dismal trap of being forced against your will into institutional care. That’s the power of an AgingOptions LifePlan. To find out more, without cost or obligation, join Rajiv Nagaich at a free LifePlanning Seminar. These popular events are held throughout the region, so register here for the seminar date and time of your choice, or call our office during the week. Let us be your guide toward a fruitful and secure retirement.

(originally reported at www.kiplinger.com and www.newretirement.com)