Feeling a little insecure about being ready for retirement? You are not alone. Insecurity about having enough money to retire is high and most people are retiring later because of it.
A recent Gallup poll found that 59% of Americans are worried that they won’t have enough money to retire. Worries of having adequate savings to retire isn’t just for those in their 50s and 60s, it also includes those in their 3’s and up. The older, pre-retirement population has more immediate concerns regarding the ability to fund their retirement years, including having sufficient savings to cover basic living and medical expenses, and long term, wondering if they will be able to make the money last. On the other hand, those in their 30’s worry about Social Security being around when they reach retirement age.
Due to these concerns and insufficient funds in their retirement accounts, the average non-retired person expects to retire at age 67, whereas in 2004 people were retiring at age 60. Times have certainly changed.
I started this blog because I am one of those people who expected to retire at age 62, then it moved to 65; a more recent consideration was 67, but ultimately I landed on 70 as my age of retirement, in order to get the maximum from my Social Security benefits. I circle around my options and what I can do to increase my retirement savings before retirement and consider a wide range of options for affordable living and making my funds last.
Here are 8 things to consider that can help reduce that worry:
Work a little longer and retire a little later
Of course, I don’t think this is the preferred solution for any soon-to-be retiree, but holding out longer to retire is one way to maximum your social security benefit, while increasing the size of your nest egg. The extra few years can make a considerable difference.
Maximize your funds
Those readying to retire or those who already have need to look at all their potential options for maximizing their funds. Talk with a financial planner to ensure that your funds are reaching their growth potential.
Consider living where your money goes further
Move to an area of the country where the cost of living is less, in retirement communities where housing is more affordable, or stretch your income and savings by living outside of the country. There are a number of very popular international retirement destinations for expats where a couple can live very well on $1500 a month.
You may want to consider cutting costs by moving from your present location to something smaller and less expensive before you retire, so you can put the savings from decreased mortage or rent payment into your retirement account. When you are ready to retire downsizing may mean a smaller home or apartment, a park model in a 55+ retirement community, a “tiny house,” or a house on wheels.
Refinance your home
Interest rates are still low, so if you haven’t refinanced, now might be the time to consider finding a lower interest rate.
Supplement your income
Find a means of making money to supplement your monthly fixed income. Think about what you enjoy and find a means of increasing your income by doing what you love. Do you have a hobby that could be turned into a business part-time? Maybe you have a skill or expertise that is marketable. Even a few hours a week working in a business that interests you, or is enjoyable, is something to consider. Identify what you love, your skills and interests and then create an income-generating activity that provides you social engagement, while paying you a wage.
Reduce your monthly living expense
If you are pre-retirement, you can increase your nest egg, which will open up your options down the road. For those who have already retired it will increase the ability to travel, enjoy activities you love, or put money away for future emergent needs.
Share living space
Some retirees are turning to living with others in intentional communities, retirement communities, or living with family or friends. Many retired people are living with their children and watching the grandkids while the parents work. People are turning to each other. Through rough times comes increased community. The light in all of this is that people are returning to family and joining together with friends.
Worry is born out of fear and fear is the result of the unknown. Researching the different options and sharing those ideas with friends and family can release some of the worry that builds up and can generate new ideas and options. I have found this blog to be helpful for me in thinking “out loud” about what my options are, how I can cut costs, and how I can create a retirement of my dreams, while living on a limited budget.
What are your dreams for retirement? What ideas have found to help you reach that dream? Please leave your comments and thoughts below.
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