How to Have Fun, But Remain Financially Solvent in Retirement

It’s every retiree’s fear: running out of money. And so we scrimp and save and deny ourselves the opportunity to do the things we've always dreamed of to make sure we don’t drain our bank account. While delaying self-gratification is one thing -- what good is a seven-figure IRA if you die too young to enjoy it?

The truth is, none of us know when our number is up. 20 years from now? 30 years?  Or Next  Tuesday?

Irvin Schorsch III, founder and president of Pennsylvania Capital Management , works with clients to not only help them accumulate enough money to maintain their lifestyle in their golden years, but how to fulfill their dreams while staying financially solvent.

Irvin offered the following tips for boomers to enjoy their golden years while stilling remaining fiscally responsible:

Boomer: I want to travel , but fear I can't afford to see the world and save at the same time? For those baby boomers that want to travel in their retirement what tips would you give so they don't break the bank?

Schorsch: There are a number of options baby boomers have available to them regarding travel during their retirement years. Home exchanges, in particular, are an attractive way to do so. Essentially, you and your partner will stay at another couple’s home in your destination of choice -- and the other couple will, in return, stay at your residence back home.

Websites such as homeexchange.com and homelink.org can connect prospective “exchangers” to one another, so that they can connect and reach a suitable arrangement. Some things to keep in mind: Are you comfortable with children in your residence? What about pets? Will you or will you not allow the other couple to use your car?

Home exchanges are one of the primary ways boomers can see the world during retirement -- all the while remaining financially solvent. By saving on hotel room fees, they can cut their travel bill and have more money to see the sights at their destination.

Lastly, for those traveling abroad, it might pay to exchange your dollars into pounds or euros now to lock in the attractive rates. Currency markets can be very volatile, so don’t let attractive exchange rates pass.

Planning a trip to Paris this summer? Why not convert half of your dollars into euros now, and save the rest to be converted a few months from now, when rates could potentially be even better.

Boomer: I would like to continue my education but didn't plan for tuition fees in my retirement package. What are some affordable ways for me to attend school?

Schorsch: Learning is one of the great joys in life -- but high tuition fees have made it prohibitively expensive for many. I advise clients to look to adult continuing education courses, weekend seminars and other workshops that invite adults to broaden their horizons. Community colleges offer a wealth of courses as well, at very attractive prices.

The burgeoning field of Massive Online Open Courses (MOOCs) are also an attractive option. Websites such as edX, Coursera and UDacity offer courses from the likes of Harvard, MIT, Berkeley and Georgetown. From Greek and Roman mythology to the history of Rock & Roll, boomers can find a wealth of topics to study, all from the comfort of their own home. All they need is a computer and an internet connection.

Boomer: According to a survey by CESI Debt Solutions, 56% of Americans still had outstanding debt when they retired. What are the best ways to ditch the debt?

Scorsch: Paying off debt is an important part of achieving financial freedom, but one must go about it strategically. The main rule to follow is to identify the debt with the highest non-deductible interest rates and work to eliminate it first. Remember, credit cards are not tax-deductible! Have $10,000 of credit card debt with a 20% interest rate? That’s a huge weight to have on your shoulders -- so make it your priority to get rid of that debt, quickly!

It’s also a good idea, wherever possible, to pay more than the minimum every month to reduce the interest expense to the family.

For boomers that still find themselves paying off the mortgage in retirement, refinancing now at some of the lowest current mortgage rates in decades, could be very beneficial.  None of us know when interest rates on mortgages will suddenly change, so if you haven’t studied your options regarding refinancing, now is the time to take the leap.

Last but not least, downsizing can help as well. Many retirees simply don’t need a four-bedroom house with an inground pool and a finished basement during their golden years. Why not move into a condominium or townhome, which will save you money via lower energy costs, lower property taxes and no real maintenance to speak of?

Boomer: How do I best afford ways to attend more costly cultural events on my retirement income?

Schorsch: The days of clipping traditoinal coupons for restaurants and cultural events are long gone! One can attend cultural events on a budget by using services like Groupon and LivingSocial, both of which offer great deals on everything from the performing arts, retailers, restaurants, and much more. You can sign up online and have these deals delivered right to your inbox.

Furthermore, for foodies who love a night out, I encourage clients to pay attention to their city’s restaurant week. Here in the Philadelphia region, many restaurants participate, from cozy pubs all the way to high-end establishments.

Volunteering is also a way to enjoy cultural venues like the opera or the theater. The same goes for museums, which often allow their volunteers to see exhibits that might otherwise cost them money at the door.

Boomer: For pre-retirees still planning for retirement, how should I allocate funds for my bucket list?

Schorsch: Allocating funds for a bucket list often goes back to  eliminating debt. It never ceases to surprise me how much money people give away by maintaining balances on their credit cards or not refinancing their homes.

It can be scary to give the family’s finances a thorough assessment - but it’s a necessary thing to do. The only thing worse than wasting money is doing so and not even realizing it.

Once you work to “ditch the debt” and free up additional money each month, you can then deposit these funds into an investment or savings account to be used to do the things you always wanted. Also feel free to allocate portions any found money such as bonuses, windfalls or inheritances to a “bucket list account” to be used down the road.