In Addition to Fixing Credit, Focus on Bolstering Income as Retirement Nears

Millions of Americans are now within just a few years of their official retirement ages, but it seems that financial difficulties suffered during and following the recent national recession have put them in jeopardy. As a result, many may face credit difficulties and income shortfalls that may make living their everyday lives more difficult to bear.

New data from a number of sources suggests that many older Americans are now dealing with financial difficulties stemming from less income in retirement than in the past. Many are pulling out of the workforce at the age they've always planned on despite the fact that the income they'll receive from their pensions, federal programs and their own savings is well below what they might have enjoyed during their working years, and that in turn can cause major difficulties. These can come not only in dealing with credit, but also in paying normal household expenses that are impossible to avoid.

Why this problem is so great
In general, experts say that for people to live comfortably in retirement, they need to have somewhere at least 75 or 80 percent of their final annual salary coming to them every year. Unfortunately, many seniors fall well short of that mark and consequently have financial dangers that could put them at significant risk for problems that threaten to endanger their standings and their credit simultaneously.

Of course, this issue might only be exacerbated when older people carry debt into their retirement in the first place. These balances, which require careful work to stay current, can sap large sums of money from retirement income every month, or else face major credit problems that could eventually result in the need for credit repair. For instance, if seniors have to choose between paying down a credit card debt or the monthly grocery bill, the decision can be easy to make. However, that might put them in a position in which they then have to deal with penalty rates and late payment fees, which in turn can make such an issue even more difficult to handle in the future. For this reason, it's important that consumers do all they can to reduce debt ahead of retirement as a means of lessening these obligations, which can quickly turn into burdens for those whose incomes fall short.

Ways to deal with the issues
On the other hand, it may also be wise for older people to do more to make sure their retirement incomes are sufficient to cover all of their needs before they call it a career. One thing many experts suggest as a means of properly assessing one's income needs and then ensuring that these issues are taken care of as best they can is to simply delay retirement by a year or two, which has two benefits at the same time. First, it will delay the date by which they begin drawing on Social Security payouts and other sources of retirement income, meaning that the monthly checks they receive when they do start tapping them will be larger, in some cases significantly. Second, that is also true because they will continue to make contributions to those accounts, and with more money to draw upon for a shorter period of time, the benefit can add up quickly and help to ensure that all financial needs are being met. Many seniors also supplement those incomes with part-time jobs in their areas, often doing work they want to do that is related to one of their passions.

In addition, that will also give them more time to properly pay down all their debts ahead of their golden years, which means that they will have fewer monthly obligations going forward, and in turn can devote more money to the things they want to spend on, and potentially worry less about the credit issues that can quickly arise when debt isn't being handled properly. Not having to make payments into a credit card balance, or even a mortgage, can be a big-time boon for many seniors' bottom lines once they stop working, and start living on a limited fixed income. 

When it comes to dealing with credit, consumers of all ages should be taking the time to carefully monitor their credit reports. These documents may occasionally contain unfair markings that can substantially lower their credit ratings and give them more financial difficulties in the future, such as when applying for a new line of credit. If any such problematic entries are discovered in the course of checking over these documents, it can be wise for consumers to contact a credit repair law firm to help them deal with the issues. These organizations may be able to help remediate the fallout from these markings more quickly than consumers might otherwise be able to achieve on their own.