Business Development Officer, T.D. McNeil Insurance Services, Fresno, California
You are not unique. Studies show that less than twenty percent of those without an active plan for retirement feel confident about retiring. Here are four strategies that you can pursue if you are unsure that you can retire on the income you will receive when you retire.
The first strategy is to increase your savings for retirement now. As people approach retirement they frequently lose responsibility for children, their mortgage may become paid-off and their disposable income might climb. Seizing this opportunity to increase saving for retirement is crucial. If your employer matches what you put into a retirement or savings program try to make a matching contribution to the company plan. Be careful about putting excessive money into the company plan as the investments contained in the portfolio might now reflect your risk tolerance and you could become quite worried over them.
Maximum contributions increase on certain retirement savings programs and you should explore the opportunity that could afford to you. Make sure your retirement’s savings are coordinated. A retirement income expert could be very helpful in this regard. There are severe penalties if you inadvertently overfund a pension or retirement savings plan.
If you are saving all you legally can for retirement you should then focus on reducing debt. The less debt that you carry into retirement the higher your satisfaction will be. At a minimum eliminate any credit card debt and installment purchase debt. Discuss with your accountant the wisdom of reducing or eliminating a mortgage.
The second strategy would be to get better performance from your investments. This can be a reason to sit down with someone who specializes in retirement portfolios. You could have investments that have underperformed for a while and have little prospects of rebounding. This might be the time to adjust your assets so that you are better able to reach your retirement goals.
The third strategy is often overlooked and yet it is the most obvious. You might be able to work longer. Forty percent of retirees start retirement because of some unforeseen event and at a date that they had not selected. The illness of parents, spouse or children can often force an early retirement. As you approach retirement make an inventory of your marketable skills and interests. Focus your attention on what you want to do and develop the expertise to move into that area whenever retirement starts. If this means staying at your current employer that can be negotiated most of the time. Some people negotiate for reduced hours, or returning to the exact same job as a consultant.
If you like your work and you like those you work with, don’t think that you must quit because you have reached some arbitrary age. Working longer is the quickest way to enhance your retirement income. My brother could probably work into his 90s because he was a programmer over fifty years and knows some proprietary computer languages that are still being used, but few people can program them.
The fourth strategy is to decide to live on less. If this is going to be your strategy, start reducing your standard of living now. Waiting until the day you retire to “downsize” can bring more trauma than you want. You can live on less now, save the difference. Then when you retire you can keep marching along. This can include moving to a smaller, less difficult to manage single story home. This could mean resuming cooking rather than eating in restaurants. It usually will include reducing the number of cars. For some this will mean establishing a joint residence with a child. While this can be done, planning is essential. Your child’s idea might be putting you in the middle bedroom and that might not be desirable.
These are practical strategies that anyone can follow to increase the likelihood that your assets will not be exhausted in your retirement and that you can enjoy your retirement. Planning is really the key to having a successful retirement.
Boy is that the million dollar question of the day! There are a whole lot of folks asking that same question...Without knowing your financial status or how near/far into retirement that you are, I cannot give you a specific plan of attack, but there are some things that you can start doing immediately that will help.
The first is downsize. Move to a smaller house, or less expensive area. Sell off the extra car, unneeded belongings, anything that is no longer really close to your heart, and can generate some cash. Do the same thing with your debt. Tighten the belt and pay off every high interest credit card or loan that you have. Save that interest you'd be paying for food and electricity. Take the money that you've found, and invest it in an investment vehicle that will provide you with an income.
The second is prioritize. What are you doing that you really could be doing without? Are you eating out 12 times a week? Is that more important than saving for your retirement? Things like lottery tickets, entertainment, take a second and ask yourself if they're worth the cost. I certainly am not telling you to stop enjoying life, but I'd ask you to consider if there is a cheaper way to do so (And lottery tickets I will tell you to stop. You lose far more money than you will ever win).
The third is to re-evaluate your current savings plan. Can you re-allocate your investments? Do you have any annuitized investments that you can be assured to not outlive? Can you shuffle investments that may have under-performed into better ones?
Lastly, are there ways to increase your income? Can one of you put off taking SSI benefits, (The longer that you delay the start of the payments, the larger those lifetime payments will be), work longer, or use a hobby to generate an income? If you like gardening, for example, can you grow vegetables to sell, or flowers to arrange for sale? Using something that you love to do anyway as a secondary source of income is as emotionally rewarding as it is financially rewarding.
I hope that there was something in my answer that will help you, have faith. Matthew tells us that God provides for our daily needs, and if you can honestly say that He has done so so far, it's a safe bet He will continue to. Thanks for asking!
.JPG){kind=avatar}
The first strategy is to increase your savings for retirement now. As people approach retirement they frequently lose responsibility for children, their mortgage may become paid-off and their disposable income might climb. Seizing this opportunity to increase saving for retirement is crucial. If your employer matches what you put into a retirement or savings program try to make a matching contribution to the company plan. Be careful about putting excessive money into the company plan as the investments contained in the portfolio might now reflect your risk tolerance and you could become quite worried over them.
Maximum contributions increase on certain retirement savings programs and you should explore the opportunity that could afford to you. Make sure your retirement’s savings are coordinated. A retirement income expert could be very helpful in this regard. There are severe penalties if you inadvertently overfund a pension or retirement savings plan.
If you are saving all you legally can for retirement you should then focus on reducing debt. The less debt that you carry into retirement the higher your satisfaction will be. At a minimum eliminate any credit card debt and installment purchase debt. Discuss with your accountant the wisdom of reducing or eliminating a mortgage.
The second strategy would be to get better performance from your investments. This can be a reason to sit down with someone who specializes in retirement portfolios. You could have investments that have underperformed for a while and have little prospects of rebounding. This might be the time to adjust your assets so that you are better able to reach your retirement goals.
The third strategy is often overlooked and yet it is the most obvious. You might be able to work longer. Forty percent of retirees start retirement because of some unforeseen event and at a date that they had not selected. The illness of parents, spouse or children can often force an early retirement. As you approach retirement make an inventory of your marketable skills and interests. Focus your attention on what you want to do and develop the expertise to move into that area whenever retirement starts. If this means staying at your current employer that can be negotiated most of the time. Some people negotiate for reduced hours, or returning to the exact same job as a consultant.
If you like your work and you like those you work with, don’t think that you must quit because you have reached some arbitrary age. Working longer is the quickest way to enhance your retirement income. My brother could probably work into his 90s because he was a programmer over fifty years and knows some proprietary computer languages that are still being used, but few people can program them.
The fourth strategy is to decide to live on less. If this is going to be your strategy, start reducing your standard of living now. Waiting until the day you retire to “downsize” can bring more trauma than you want. You can live on less now, save the difference. Then when you retire you can keep marching along. This can include moving to a smaller, less difficult to manage single story home. This could mean resuming cooking rather than eating in restaurants. It usually will include reducing the number of cars. For some this will mean establishing a joint residence with a child. While this can be done, planning is essential. Your child’s idea might be putting you in the middle bedroom and that might not be desirable.
These are practical strategies that anyone can follow to increase the likelihood that your assets will not be exhausted in your retirement and that you can enjoy your retirement. Planning is really the key to having a successful retirement.
The first is downsize. Move to a smaller house, or less expensive area. Sell off the extra car, unneeded belongings, anything that is no longer really close to your heart, and can generate some cash. Do the same thing with your debt. Tighten the belt and pay off every high interest credit card or loan that you have. Save that interest you'd be paying for food and electricity. Take the money that you've found, and invest it in an investment vehicle that will provide you with an income.
The second is prioritize. What are you doing that you really could be doing without? Are you eating out 12 times a week? Is that more important than saving for your retirement? Things like lottery tickets, entertainment, take a second and ask yourself if they're worth the cost. I certainly am not telling you to stop enjoying life, but I'd ask you to consider if there is a cheaper way to do so (And lottery tickets I will tell you to stop. You lose far more money than you will ever win).
The third is to re-evaluate your current savings plan. Can you re-allocate your investments? Do you have any annuitized investments that you can be assured to not outlive? Can you shuffle investments that may have under-performed into better ones?
Lastly, are there ways to increase your income? Can one of you put off taking SSI benefits, (The longer that you delay the start of the payments, the larger those lifetime payments will be), work longer, or use a hobby to generate an income? If you like gardening, for example, can you grow vegetables to sell, or flowers to arrange for sale? Using something that you love to do anyway as a secondary source of income is as emotionally rewarding as it is financially rewarding.
I hope that there was something in my answer that will help you, have faith. Matthew tells us that God provides for our daily needs, and if you can honestly say that He has done so so far, it's a safe bet He will continue to. Thanks for asking!