Last Minute Retirement Planning By Jonathan Edelfelt |
| Go Back With the sub-prime mortgage crisis, the stock market downturn and prices for gasoline and food going through the roof, saving for retirement has become more difficult than ever. It is especially difficult for those who have waited until their 40's or 50's to start saving for retirement. If you got a late start on retirement, this is no time to scold yourself for what you should have done. Instead, it's time to take quick action. Here are ten things you can do to get your retirement back on track.
This may sound obvious, but every little bit helps. Since you haven't been able to save much for retirement, this should tell you that you're probably living a little beyond your means. Look for ways to cut your expenses and redirect the money toward savings. Consider money saving ideas such as: raising your insurance deductibles on home, car and health insurance; getting rid of your cable television, cell phone, newspaper, and magazine subscriptions; and taking public transportation to work.
Working a few years longer can really enhance retirement savings, since your later working years are usually your highest earning years too. Taking a second job can also provide a big boost to your income. Consider too the possibility of part-time work in retirement. While you're still working full-time make sure to build a network of people whom you can contact for post-retirement work.
If your job allows you to move, consider relocating to a part of the country with a lower cost of living. This can save you money across the board on housing, food, insurance, and taxes. 4. Downsize Your Life. Living large causes many people to forego saving for retirement. Consider scaling down your life. Consider moving to a smaller home, driving your cars longer, ditching the gym membership and eating out less. 5. Rent a Room. If selling your home is not possible, consider putting your home to work for you by renting out a room. Renting a room or two can help defray some of the expense of keeping a larger home and allow you to direct more toward your retirement savings. 6. Take Your Social Security Later. The longer you wait to take your Social Security benefit, the higher it will be. Taking your benefit before your full retirement age can reduce it by as much as 30%. You can also delay taking your benefit until after your full retirement age and it will increase by up to 8% per year. 7. Sell Assets You Don't Use. Sell off that piece of land where you thought you might build a retirement home and any other assets that you are not using. If you are playing retirement planning catch-up convert these items into cash that you can invest to build up your nest egg. 8. Take Advantage of Tax-Deferred Plan Catch-Up Provisions. IRAs, 401(k)s and other tax-deferred retirement savings plans allow older workers to make additional "catch-up" contributions. Make sure you contribute as much to tax-deferred savings plans as you can, since the money grows tax- free and some contributions are tax deductible. 9. Modify Your Retirement Goals. Consider a more modest retirement. Most of today's retirees don't have millions in the bank. According to the Social Security Administration, Social Security is currently the major source of income for almost two-thirds of America’s retirees. For one-third of retirees, it is in effect the only source of income. Many of these retirees are living comfortable, productive lives with only modest incomes. Perhaps you can too. 10. Don't Panic. Many people who get a late start on retirement consider making more risky investments in an attempt to make up for lost ground. That's not investing, it's gambling and late starters shouldn't gamble with their retirement. As the first quarter 2008 stock market downturn demonstrated, investments can go down as well as up. By making risky investments, even investments that have the potential for high returns, you may end up even worse off. Strategies for the Rest of Us. Go Back (c) 2008 by Jonathan D. Edelfelt. All rights reserved. Was this article helpful? |
