Are you one of the 64 percent of Americans concerned about not being able to afford retirement?1 It’s understandable to have that concern. Retirement is a substantial financial goal, perhaps the biggest financial challenge you will ever face. You likely don’t want to continue working during a time when you should be out enjoying your golden years.
Even if you’re behind on your savings efforts, the good news is that it’s never too late to correct course. With some changes to your habits, mindset and financial discipline, you can get back on track for a happy and secure retirement in no time. Below are three tips to get you started:
Become a prolific saver.
One of the keys to ensuring a happy retirement is becoming a great saver. That may mean adjusting your lifestyle to free up cash flow. For instance, you may need to cut back on discretionary items like dining out, shopping or travel. A budget can help you identify areas in which you need to make spending cuts.
You also want to save wisely. Consider using tax-advantaged savings vehicles like IRAs and 401(k) plans, as the deferral of taxes could help your funds accumulate at a faster rate. Also, make sure you fund your 401(k) plan sufficiently to capture all employer match contributions. Those matching contributions are free money that can substantially boost your savings rate.
Rethink the big house.
It’s natural to want a big, beautiful new house, but if you’re behind on saving for retirement, you may want to rethink the purchase. Home-ownership can come with significant costs that can hinder your ability to be a prolific saver. Large mortgages, insurance, utilities, maintenance costs and taxes can consume a significant amount of cash flow. You may find all of those costs are reduced with a smaller home.
Also consider renting. It’s true that renting can create an ongoing monthly payment and that you never own the property free and clear. However, it also eliminates costs for things like taxes, certain types of insurance, maintenance, homeowners fees and possibly some utilities.
Delay Social Security.Some people think that when you reach retirement age you should start collecting your Social Security benefits. It’s possible, however, to delay receiving your Social Security payments past retirement age. And by doing so, you can actually increase the amount you receive from your benefits.
Full retirement age for most people lands between their 66th and 67th birthdays. If you start receiving benefits before your full retirement age, they could be reduced as much as 30 percent.2 On the other hand, you can receive an 8 percent increase in benefits for every year past your full retirement age that you wait to file.3 Having a higher Social Security benefit can mean more guaranteed income and can reduce fear and uncertainty later in life.
Searching for a retirement planning strategy to fit your goals? Let’s start a conversation. Give us a call at Gregory Financial Group and discuss your goals with a financial planning professional today.
This information is designed to provide a general overview with regard to the subject matter covered and is not state specific. The authors, publisher and host are not providing legal, accounting or specific advice for your situation. By providing your information, you give consent to be contacted about the possible sale of an insurance or annuity product. This information has been provided by a Licensed Insurance Professional and does not necessarily represent the views of the presenting insurance professional. The statements and opinions expressed are those of the author and are subject to change at any time. All information is believed to be from reliable sources; however, presenting insurance professional makes no representation as to its completeness or accuracy. This material has been prepared for informational and educational purposes only. It is not intended to provide, and should not be relied upon for, accounting, legal, tax or investment advice.
The material is not intended to be legal or tax advice. The insurance agent can provide information, but not advice related to social security benefits. Clients should seek guidance from the Social Security Administration regarding their particular situation. The insurance agent may be able to identify potential retirement income gaps and may introduce insurance products, such as an annuity, as a potential solution. Social Security benefit payout rates can and will change at the sole discretion of the Social Security Administration. For more information, please consult a local Social Security Administration office, or visit www.ssa.gov
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