A home based business is an answer to the retirement worries that everyone is facing when retirement funds are shrinking. Few Americans have saved enough money so that their retirement can last for more than 30 years. People are outliving their money. So what is the answer? Well, you have 3 choices; a delay in retirement by working longer, learn to live on less money, or start a home based business that will be able to give you a residual income to last the rest of your life.Let’s look at all the choices.First choice is a delay in retirement. In order to live at a lifestyle that you are comfortable with, you will have to work past your expected age of retirement. How much longer depends on the kind of lifestyle you want. It also depends on the economy and the cost of living at the time of retirement.Second choice is to learn to live on less money. Here are some steps you would have to consider:Downsize your home – less mortgage and lower maintenance costs
Give up one car – a couple will have to learn to live with one car which lowers cost of insurance and car maintenance
Must Spend Taxable Accounts First – you must use the funds that are taxed each year before you touch your 401K and IRA’s. This will reduce your tax burden.
Hidden Fees – Avoid banking fees, ATM charges or overdraft charges on your checking account. Check out any mutual fund fees or penalties for early withdrawals; make sure you have one of the lowest ones. Pay all your credit cards in full, so you can take advantage their offers (travel points). Don’t retire with debt!
Sign Up for Medicare on Time – you must sign up during the seven month period beginning three months before your 65th birthday. If you don’t, then there is a premium increase of 10% for each 12 month period of delayed enrollment after age 65. If you are still working past the age of 65 and receive health insurance benefits from your employment, then you must enroll within 8 months of leaving the job to avoid the penalty.
Find a Prescription Drug Plan – you must check out-of-pocket costs of the prescriptions you are receiving not just the cost of the plan. Compare all the plans. Seniors can only switch drug plans during open enrollment, which happens only once a year, so be careful.
Delay Signing Up For Social Security – benefits start at age 62, but benefit checks are reduced by 20-30% for workers who claim their checks at this time. Full retirement age is now 66 (if you are born from 1943-1954) and you can then claim full benefits. If you are born after 1954, full retirement age is now 67.
Leave Expensive Cities – now that you are no longer tied to your job, you should consider moving to a city where the cost of living is much lower, taxes are lower, and housing is cheaper.
Cut Expenses – Get rid of your land line phone, your cable TV, and some hobbies such as golf, bowling, theater tickets, and gym memberships.
Find free entertainment – either by volunteering at your local theater or your local botanical gardens. You will have to look for less expensive hobbies.
Resist Gift Giving – you will have to resist spending money on your children and grandchildren. This is the hardest, because emotionally you want to but financially you can’t.
Eat Out Less And Cook More – you will have to become part of that “early bird” crowd or share meals.Sounds pretty bleak, doesn’t it? It doesn’t have to be because there is a third choice, start a home based business. This can be done either part-time or full-time.Your home based business can give you a residual income so that you don’t have to worry about any of the above. You can live the lifestyle you either are at now or have always dreamed of. The statistics for a home based business failing are high, but a home based business with a great marketing system can give you a great advantage. A marketing plan can bring your business to another level.