If you’re a senior concerned that your level of retirement savings is not enough to allow you to stop working, you are most certainly not alone. One in five Americans over the age of 50 have no retirement savings at all, while close to half feel that they do not have enough saved up to comfortably retire.
There are countless reasons why this might be the case, all of them valid and more common than you might think. Maybe you had a long period out of work to raise a family or due to illness. Maybe you had to withdraw from your IRA to cover emergency expenses.
Whatever the reason, it’s never too late to get back on track. If you’re worried about your retirement planning, read our expert guide to help you start building a realistic savings pot, starting today.
How to Think About Retirement Savings
A solid retirement plan is essential to ensuring you don’t outlive your savings. Start by determining your monthly expenses, taking inflation into account, and estimating your income from various sources like Social Security, pensions, and personal savings.
This step will give you a clear picture of your financial needs and help you set realistic goals. Make sure to assess your budget and long-term financial goals regularly to stay on track. Retirement planning doesn’t have to be intimidating; think of it as a roadmap to guide you toward financial security for seniors.
Catch-Up Contributions Are Key
Once you hit 50, you’re eligible for catch-up contributions on retirement accounts like IRAs and 401(k)s. These additional contributions can give your retirement savings a big boost, especially in your final working years. For example, in 2024, you can contribute up to $7,500 annually to a 401(k) in catch-up contributions. Even if you’re close to retirement, it’s never too late to increase your contributions and maximize your retirement income.
Downsize If You Can
Many seniors find that they have more space than they need once their children have moved out. Selling a larger home and moving into a smaller, more manageable one can help you save on maintenance, utilities, and taxes. Downsizing can be a great way to free up cash while also cutting down on expenses. You may even be able to use the extra cash to increase your retirement savings or enjoy your retirement more comfortably.
Delay Your Social Security
For each year you delay taking Social Security beyond your full retirement age (up to age 70), your monthly benefit amount increases. This is especially valuable if you’re in good health and expect to live a long life. Waiting until 70 can lead to a significantly larger monthly check, giving you greater financial security in retirement. Be sure to consider this strategy if you have other sources of income to bridge the gap in the meantime.
Maximizing Retirement Income
Managing your debt is the first step towards enabling higher post-retirement income. Paying off high-interest debts like credit cards is, without a doubt, the first place to start. Once you’re debt-free, you can save or invest more each month. Prioritize debt reduction to reduce financial stress and improve your cash flow.
When it comes to investing for retirement, low risk is the name of the game. Maximize retirement income with CDs, treasury bonds, or dividend-paying stocks – assets that are most commonly recommended for older investors. Balancing your portfolio with conservative investments can help preserve your capital while still earning a modest return.
Budget For Your Lifestyle
Budgeting is crucial for stretching your retirement savings. Create a spending plan that reflects your priorities, whether that means traveling, spending time with family, or simply maintaining a comfortable lifestyle. Having a clear budget can help you avoid overspending and ensure your funds last throughout your retirement.
Here are some essential budgeting categories:
- Housing costs
- Medical expenses
- Travel and leisure
- Food and dining
- Emergency fund
While not all of these will be negotiable, you will be able to find wiggle room that could free up substantial savings. Dining out, leisure, and travel will be the easiest to cut, so start here and put the money you would have spent into a high-yield savings account or invest it in one of the assets mentioned above.
Save on Senior Living Costs
If you’re considering a retirement community, explore options that fit your budget without sacrificing quality. Many communities offer tiered services, allowing you to select only the amenities you need. Opt for flexible plans to help you save money while enjoying a comfortable, fulfilling lifestyle. Additionally, ask about any seasonal promotions or referral discounts, which can make senior living more affordable without compromising on the care and activities you enjoy.
Meet with a Financial Planner
Professional guidance can make a significant difference in your retirement planning. A financial advisor can help you optimize your investments, minimize taxes, and structure your withdrawals to ensure your savings last. Meeting with a financial planner can give you the personalized advice needed to secure your retirement.
When choosing an advisor, look for someone who understands the unique needs of seniors and has experience working with retirees. Ask about their credentials, fees, and approach to retirement planning so you can feel confident that you’re in good hands.
Discounted Senior Living For Oklahoma Veterans
No matter where you are in your journey, it is possible to start building up the retirement savings you’ll need to enjoy your golden years.
With these retirement savings tips, you can start to cut your costs, make your money work for you, and make the right adjustments to ensure your present way of life does not impact your future finances. When it comes to finding a retirement community, it is also essential to see which communities can offer you quality living at the best possible price.
For example, veteran retirees at Morada Southridge are eligible to save thousands of dollars a year, thanks to our discounted rental program for vets. To find out more about our senior financial advice and benefits for those who served our country, do not hesitate to get in touch with our team today.
