(2 Minute Read)
How much is enough when saving for retirement? Saving for retirement is a lot harder than most seniors think—it’s more than relying on Social Security and an annuity or pension. Making a judgement of what your retirement will be like when you’re young and beginning to save through retirement plans isn’t all that dependable. However, if you’re making slight adjustments to how you’re saving you can end up with more retirement funds to lean on. As a retiring senior, there’s a few options that you can use to increase the funds you do have.
Save More Than You’ll Think You Need
Both AARP and the Social Security Administration recommend that people save roughly ten times their annual salary to prepare for retirement. Ten times! But anticipating how much you’ll need when you’re younger isn’t foolproof. Making savings adjustments as you get older and increasing the amount you’re putting away for retirement can really help. Make changes with pay increases and speak to your advisor to get a better understanding of how much you should be saving in order to live your retirement the way you want. Always be saving a little more than you think you’ll need in order to have the most for your retirement.
Make Lifestyle Adjustments
Of course, the other thing many people are underestimating is how long they’ll actually live—and that means a lot when we’re talking about retirement. There’s lots of talk about “outliving your retirement” right now because it’s a very real issue.
If retirement isn’t exactly what you thought it would be and you’re paying more for cost of living than you anticipated, you may consider making some lifestyle adjustments that can allow you pay your bills without the stress. For example, you can sell your home and move into a smaller one with smaller payments or sell extra cars.
And let’s not forget about debt. Avoiding debt as much as possible, from credit cards to full mortgages, is important to maintain financial stability. Even more ideally, you’ll have paid off most of this debt by the time you’re ready to retire, and your nest egg will be nice and secure.
Investing for Seniors
One of the best ways you can prepare for retirement is by investing, but investing doesn’t have to stop once you’re retired. You may not invest as aggressively as you did when you had a regular income, but there are plenty of conservative investment options. Many retirees opt to mix their portfolios with balanced mutual funds to provide some more careful investments, while allowing their stocks to offer potentially higher gains.
If you need to both cut debt as well as find additional funds for investment, consider selling a life insurance policy in a life settlement. You will rid yourself of the monthly premium while adding a nice sum of money to your nest egg. Use our qualification calculator to see if a life settlement is a good option for you.