Articles

Retirement

Jan, 3, 2020 Topic: Hobbies, Retirement

SmartRE Choices for Hobbies

According to USA Today, 34% of people approaching retirement intend to spend their time pursuing hobbies.  But, since most people have spent their pre-retirement time working and raising a family, there was never enough time to commit to hobbies.  So what choices are there?

Whether you like to spend time alone or with others, inside or outside, or saving money versus spending money, there are a lot of wonderful things to do to occupy your time.  Because studies show that maintaining a routine, even if it is not as robust or strict a routine as your former workday, is critical to a healthy retirement. 

‘Making’ is a term that covers creating with your hands.  Artwork like painting, drawing, and sculpting, craftwork like crochet, scrapbooking, or knitting, and shopwork like woodworking or working on cars are all hobbies that fit within the ‘making’ category.  Working with your hands has multiple benefits, not least of which is the finished product.  The gratification of a beautiful (to just you or to everyone) piece of art makes the hours of effort pay off.

If making is too much, try finding.  As in finding treasures at swap meets, flea markets, or arts conventions.  You can build collections like car parts or comic books or lamps or thimbles or movie posters or lunchboxes, or dabble across categories, but the thrill of the hunt drives ‘pickers’ to find that item that others overlooked or even trashed.  Building your knowledge so you can spot the needle in the haystack is a constant driver, and you’re always on the lookout for something you’ve never seen before.

Keep your mind active through continuing education.  You can do something close by at a nearby parks and recreation center or community college, you can go a little further to a four-year university’s “learning in retirement” program.  Many schools offer UBRC, or university based retirement communities.  There you immerse yourself in the college experience – with people like you – and live in a campus-like facility with events, gyms, and classes all a walk away. 

Go global and combine travel with education.  Road Scholars is an organization that individuals, couples, and families love.  See the world and learn deeply while also closely embracing the local culture of the country you visit.  Its killing three birds with one stone. 

Before you go away, consider starting to learn the language of the country you’re visiting.  Studies now show that learning a new language is no harder than when you’re young.  And learning that second (or third?) language stimulates cognitive activity, creates new neural pathways, and helps to decrease chances of developing Alzheimer’s. 

If travelling far and enrolling in classes is too much, you can still learn a lot just by day-tripping.  People are always amazed at what’s in their own backyard.  State parks, local museums, funky shopping districts – new and fun things are typically a short drive away. 

If you just want to sit at home, fill your time reading, solving puzzles, playing mind games, competing online in chess or bridge, or solving the daily crossword.  Create your own little reading club, deciphering motifs, symbols, and themes with your spouse, sister, or friend down the street.  Play any of a number of highly rated apps on your phone.  Medical News Today rated their favorites as Luminosity, Elevate, Peak, Fit Brains, Reaction Field, and Speedy Sorts. 

Birdwatching is something you can do from any window in your house.  If you like to travel, it can be done all over the globe as well.  Watch or read “The Big Year”, a great film about the passion and devotion of bird watchers.  A wonderful documentary about the people of birding is called “Birders: The Central Park Effect”.  Phone apps make this hobby easy as well.

Hobbies are a fantastic way to ease the transition from work to retirement.  Remember, though – they cost money.  Lessons for painters or musicians, binoculars for bird watching, studio space for sculptors, furniture purchases, tuition expenses, or frequent global travel – it takes substantial money to fund your interests.  Don’t take away from your retirement savings.  Get the money instead from your home equity.  Speaking of hidden treasures, that’s just what your home equity is.  Your home has grown in value since you first purchased it, and that increase is just sitting in your equity.  Take the cash frozen in your equity and put it to use – all while remaining in your home.  Cash in and stay in – the SmartRE Way. 

A look at different hobbies and what they do for you….
Sep, 11, 2019 Topic: Debt, Retirement

Debt & Retirement

Everyone is familiar with debt. It is the cost associated with taking the next step to reach goals like getting an education, buying a car, or purchasing a house. Debt sticks with people even after those goals have been reached. It’s not uncommon to have debt when you enter retirement. The question is, what do you do about it? Here’s an overview of what to know about having debt in retirement and how to address it.

The Retiree Debt Trend

Debt often feels isolating. But in reality, debt among retirees is not uncommon. Between 2003 and 2017, the amount of debt has gone up 87 percent among those ages 55 to 80. Credit card debt, mortgage payments, student loans, and car payments help contribute to this. Other financial factors like the availability of credit, lower interest rates, and wealth generated by the housing and equity markets contribute too.

The average debt among people 55 to 64 is $108,000. Those ages 65 to 74 have $66,000 in debt. Because of these high average debts, people in these age groups opt to delay retirement and keep working.

The Unknown Factor

Not retiring may help pay down debts. But it offers no protection against unforeseen situations like high tax bills, unexpected health challenges, or a family member in need of financial help. People commonly turn to credit cards for unexpected expenses or other high-interest options. This often puts retirees already saddled with debt into more even debt than they can handle. One way to address this debt is to start making a plan to get out of it.

Planning to Tackle Debt

Making a list of debts and include the amount owed, the terms of repayment, and the interest rates is a good place to start. From this list, put the debts that cost the most at the top and plan to pay those off first. But before thinking how to pay them off, ask how these debts came about, to begin with. Understanding the source of debt and creating a budget or a financial plan will help prevent the same debt problems at a later time.

Financial Options

Lack of financial resources often contributes to current debt problems as well as recurring ones. This is why financial experts frequently advise retirees not to rush into any particular financial option to address debt. Instead, consider assets that already exist. A home is usually the largest asset that a retiree has. Refinancing the home or taking out a reverse mortgage are two popular options that people take advantage of. But both of them come with risks.

Refinancing a mortgage lowers payments and can provide cash out in the immediate. However, it can strain the budget over the long term. People who continue to work after reaching retirement age cannot work forever. Therefore, the new mortgage payment has to be comfortable to pay when income is less.

Since reverse mortgages do not require a payment, this may seem like an option for most older Americans looking to pay off debt. But reverse mortgages are very complex transactions and they are problematic due to maintenance requirements and for homeowners that have other people living with them. The overall cost of a reverse mortgage loan is also a factor to consider.

Options for Accessing Home Equity

Accessing home equity is a solution for retirees that have debt. But if a refinance payment is too high and a reverse mortgage is too complicated or doesn’t work for the situation at hand, what is the alternative for accessing equity?

Consider a home ownership program like SmartRE. SmartRE allows homeowners to access their home’s equity by selling a portion of the home’s value to an investor. The homeowner can use the proceeds from the sale to pay off debts without extending the term of an existing mortgage or putting their home at risk with a complicated reverse mortgage.

In states like California where the cost of real estate continues to rise, drawing down on home equity benefits both the homeowner and the investor. The homeowner will continue to benefit from the equity in the home and have an affordable way to repay the investment.

Entering retirement with debt is a challenge that causes stress and anxiety for many people. That doesn’t have to be the case. Creating a financial plan and considering the best way to utilize existing assets is one way to eliminate debt for good.

To learn more about the smart way to leverage home equity, visit SmartRE today.