“If everyone saved a decent chunk of their income throughout their career and never dipped into savings to deal with emergencies, all could enjoy a cushy retirement.”
In a perfect world, we’d all have saved enough by age 60 to relax about money and start planning our golden years. However, in reality, says Bankrate.com, most people find themselves rapidly approaching retirement with not nearly enough savings. Some key suggestions are covered in “6 last-minute retirement planning strategies.” No, they’re not as good as a lifetime of steady savings, but they’re better than nothing.
Start saving like crazy. Reduce all discretionary spending and put anything and everything you can into your retirement accounts. If you’re over 50, you can add a catch-up contribution to your annual IRA limit of $6,5000—giving you a maximum contribution in 2018 of $24,500. If you exceed the limit, put the money into a savings account. Just be sure to save it.
Consider a shift to your investment portfolio. If your investments are all in low interest rate CDs or bonds, you may want to make a change. This could involve modest moves up on the risk scale that could make a difference. Make moderate changes. Big shifts are never a good idea.
Keep working. While you are able to work, you aren’t drawing money from your retirement accounts, so investments have more time to grow. Working longer also gives you more time to add to those funds. Delaying retirement also increases the income you’ll get from Social Security.
Change your retirement budget. If you thought you were going to spend your retirement living high, rethink that. If you don’t have enough saved, you will likely have to cut expenses. If you have, for example, $400,000 saved for retirement and are used to spending $50,000 annually, your savings won’t last much past eight years (ignoring any investment gains).
If you cut your spending in half, your savings will last 16 years, and if your investments do any growing, so will your overall portfolio. If you can’t make that much of a cut, consider part-time employment. Many retirees today are using this time to pursue careers they once considered a hobby, or simply taking lower-paying, less stressful jobs to round out their household budgets.
Sell your home. If you have a lot of equity in your home, consider selling your home and using the proceeds to add to your retirement account. Rent or buy a smaller home or move to an area where home costs are lower. You may also consider a reverse mortgage, which lets you continue to live in the house, while receiving monthly income.
Be sure to protect your retirement accounts with an estate plan that includes a will, power of attorney and healthcare directive. An estate plan is important for all retirees, whether their assets are large or small. Consider it an investment in your future.
For more information about estate planning in Orlando, FL (and throughout the rest of Central Florida), visit our estate planning website and be sure to subscribe to our complimentary estate planning e-newsletter while you are there.
Resource: Bankrate.com: (July 25, 2018) “6 last-minute retirement planning strategies”