Managing Depression After Retirement

Depression is one of the most prevalent mental health conditions among older adults, and a commonly made mistake in planning for retirement is not thinking about the significant emotional adjustment that takes place during this time. 

Symptoms of depression can include disturbed sleep, general sadness and a loss of interest in activities that a person used to enjoy, and these can last anywhere from weeks to a number of years – depending on whether satisfaction of life is eventually achieved or not and if an affected person has decided to seek treatment.

If you’ve been feeling depressed after stopping work and you’re unsure why, there are a few steps you can take to help address and alleviate it:

Determine why you’re Feeling Down

Several aspects can cause you to feel depressed after retirement. For example, you may think that you no longer have a sense of purpose because you’re no longer going to work each day. Alternatively, you may not be spending as much time with family and friends as you’d initially anticipated – causing you to second-guess your decision to retire. 

Spend time thinking about what could be causing you to feel depressed – it could be one or more aspects. If you’re struggling to determine the cause, consider journaling daily to track your thoughts. This will allow you to look for potential patterns or trends that may recur.

Identify Activities that you Enjoy

Along with devoting time to activities and/or hobbies you enjoy that may have been neglected during your working years, consider engaging in something new from time to time. Some ideas here include:

  • Volunteering with a charity you feel strongly about
  • Enroll in continuing education classes at a local college or even online
  • Join a senior citizen’s recreational group or sports club
  • Take up part-time employment

When deciding which activities to get involved in, consider what you need the most. Do you want to make new friends? Are you keen to feel useful somehow? Would you like to earn a little extra spending money? Would you like to engage in a little of each? The choice is yours.

Connect with Other Retirees who are Struggling to Adjust

If you’re feeling depressed after retiring, remember that you aren’t alone. There may very well be someone else in your existing social circle or network that is also struggling to adjust to the new normal of not going to work every day. 

Connecting with these people will help you support each other while dealing with the emotional and mental challenges you’re facing during your golden years. If you struggle to meet new people face to face, consider searching for retiree support groups online – these can often be just as beneficial as physical groups and activities. 

Figuring out what is most important to you during retirement and eliminating activities that may be causing you to feel depressed will go a long way in helping you to get the most out of this time of your life. Talking with a financial advisor can also help alleviate some of the financial worries you may be experiencing during retirement as well. 

Continue reading
retail therapy

How much will that Retail Therapy Really Cost?

Many consumers turn to retail therapy as a means of helping them to feel better for a short while after dealing with a difficult situation. Although engaging in a little impulse spending on that new dress and shoes may pick up your spirits for a short while, the truth is that your retail therapy habit is probably costing you a lot more than you can afford to spend. 

Crunching the Numbers

A survey conducted a few years ago studied the habits of approximately 2,000 shoppers and found that the average American spends a little over $2,200 per year on these ‘pick me up’ purchases. The poll went on to note that the typical shopper purchases around 12 items per month in store and eight to 10 online, with their shopping taking up almost 90 hours a year in-store and more than 70 hours per year online. 

Most Americans have admitted that as much as 25% of their shopping is based more in pleasure than in true necessity nowadays, with more than 65% stating that shopping has therapeutic qualities for them. Around 70% of shoppers admitted having purchased something nice just to cheer themselves up, and approximately 15% of them said that they engage in retail therapy quite regularly. 

More than 70% of the survey respondents also said that they were living from paycheck to paycheck at the time, meaning that their retail therapy habit was hurting their finances severely. 

Ditching the Habit

If you regularly succumb to retail therapy and you’d like to break this habit for the sake of your finances, the tips below will help get you on the right track:

  • Identify your triggers – What causes you to go impulse shopping? A stressful day at the office? Feeling lonely? Trying to fit in with certain friends? 
  • Delete spending apps and emails – unsubscribing to emails from your favorite stores and removing shopping apps from your phone will go a long way in helping to reduce temptation substantially
  • Try a new hobby – although initial expenditure may be needed to get set up with your new hobby, it will leave less time for going impulse shopping – which will help your budget recover over time
  • Entertain at home – if you’re in the habit of heading to the mall to meet up with friends, go shopping and eat out, this will definitely hurt your budget over time. Instead, invite friends over for coffee or a meal at home. You’ll still be able to enjoy spending time together, but for a fraction of the price – and there won’t be any items tempting you in the store windows at the mall

Although there is usually no harm with engaging in a little retail therapy from time to time, it becomes problematic when your household finances start suffering as a result of this habit. A great way to ensure that you’ll still be able to treat yourself from time to time is to set aside a few dollars in your weekly or monthly budget specifically for this purpose. 

Continue reading
bad credit

Bad Credit Score? Improve it with these Tips

Your credit score is probably the most important aspect of your financial health because it provides information to potential lenders regarding your level of responsibility where using credit is concerned. This means that the higher your score is, the better your chances will be for obtaining various forms of credit and/or loans. In addition, holders of higher credit scores will normally benefit from lower interest rates when borrowing money.

If you’re struggling with a low credit score, the good news is that there are steps that can be taken to improve it:

Start by Paying Down Revolving Credit Balances

If you’re able to pay more than the minimum required amounts on any outstanding balances you’re carrying, now is the time to do this. Paying more than the required amount will not only reduce the amount of interest you’ll pay over time, it will help lower your credit utilization rate as well – which will in turn improve your overall score. 

The sooner you can pay off your balance each month, the better – and once repaid in full, your credit score will usually increase again.

Don’t Miss Payments

When determining credit scores, your actual payment history will be one of the most crucial aspects that are considered. As such, having a long history of paying on time – or even early – will go a long way in helping to improve your credit score.

Aim for 30% Credit Utilization or Less

Credit utilization refers to the amount of your credit limit that’s being used at any given time and it is the second most important factor when it comes to credit score calculations. 

The easiest way to keep this ratio under control is to repay credit card balances in full each month. If this isn’t possible, your next best option is to ensure that your total outstanding balance is kept at 30% or less of your full credit limit. From there, you can start working towards getting this down to 10% or under – which will be ideal for helping to improve your credit score.

Request a Credit Limit Increase

When your credit limit is increased and your outstanding amount remains the same, it lowers your overall credit utilization virtually immediately. If your income has increased over the past year or two, you stand a fairly good chance of having your request for a credit limit increase approved – which will ultimately improve your credit score.

Check your Credit Report for Errors

Another way to increase your credit score relatively quickly is to review your credit report for any errors that could be affecting it negatively. You stand an excellent chance of increasing your score by disputing errors and having them removed as quickly as possible. 

When it comes to improving your credit score, it’s important to remember that there’s no one solution that will work for everyone. It’s also strongly recommended that you obtain copies of your credit report from the various institutions such as Experian or Equifax annually, as this will allow you to spot errors and dispute them as quickly as possible. 

Continue reading

Are Social Security Benefits Sufficient to Support Retirees?

Although retirement is often referred to as the golden years, several elderly Americans certainly wouldn’t describe this time of their lives in that way.

In fact, research undertaken by the Center for Social and Demographic Research on Aging at the University of Massachusetts in Boston revealed that up to 50% of Americans over the age of 65 who live on their own and around 25% of those in two-person households simply don’t have enough money to cover even the most basic of essential each month anymore. 

Measuring Costs with the Elder Index

The Elder Index measures the basic costs that most households have to cover and how well they’re able to afford them. These costs include housing, food, transportation, health care and other basic essentials and don’t take extras into account such as vacations, eating out or entertainment. 

Amounts for the Elder Index vary according to an individual or couple’s actual situation. For those who don’t have to pay a mortgage anymore, the Elder Index is just over $21,000 per year for an individual and just under $32,000 for a couple. 

The estimates also increase for anyone who’s still renting to around $25,500 for singles and just over $36,000 for couples. Costs for seniors who still carry mortgages rise to around $32,000 for singles and a little over $42,000 for couples. This means that up to half of senior citizens simply cannot afford to cover their basic living expenses from month to month anymore. 

Determining Social Security Benefit Amounts

As of January 2022, Social Security Administration has noted that beneficiaries would be receiving a 5.9% increase in payout amounts. This is one of the largest cost of living adjustments that have ever been made to this benefit. 

The average monthly Social Security benefit for eligible single seniors will be around $1,565 per month and approximately $3,187 per month for retired couples where both spouses qualify. This equates to around $18,780 and $38,244 per year respectively, which is not nearly enough for recipients to cover basic expenses, let alone any unexpected emergencies that may crop up. 

Although Medicare benefits are available to seniors, these may not always cover all medical expenses after retiring either. 

Additional Savings are Crucial

Although it may have been possible to live exclusively on Social Security benefits a few decades ago, this is no longer the case – even for seniors who relocate to cheaper cost of living areas. As such, it’s crucial for everyone who is still working to contribute as much as they can comfortably afford towards some form of savings or retirement plans such as an IRA or 401(k).

Even small amounts saved over the course of 20 to 30 years will make a significant difference to a senior’s budget when the time comes to stop working – thanks to the power of compounding interest. If you would like ot learn more about setting aside funds towards your golden years that will allow you to do more than merely get by each month, contact our financial advisors today. 

Continue reading