Many of us watched our parents and grandparents retire with relative ease. They might have earned a pension through their employers which, along with Social Security and their own savings, provided them a reasonable lifestyle over the last decade or so of their lives.
Now, retirement isn’t so simple anymore. For one thing, the average lifespan has increased so much that we might spend twenty or thirty years in retirement! On top of that, pensions have mostly gone the way of the dinosaurs. Most of us can’t count on a pension anymore.
So, you’re going to live longer, but on less money. Yikes! Luckily, though, we can provide you with many different options for funding your retirement, so that your income will hopefully last as long as you do.
Catch up on contributions. It’s always better to begin saving for retirement at the beginning of your career. But if you neglected to do that, or you’re still worried that you aren’t saving enough, you can max out your retirement plan contributions from here on out. And once you turn age 50, you can save additional money each year. This year, the IRS allows an additional $6,000 in tax-advantaged retirement plan contributions for those age 50 and older.
Wait a bit longer. For each year that you delay claiming Social Security beyond your full retirement age, your benefits grow by about 8 percent. Plus, you’ll still be stashing money (up to $24,000 a year) in your tax-advantaged retirement fund, you can enjoy other retirement planning opportunities, and you can pay down debts before you retire.
Look into additional opportunities. Speaking of those “other retirement planning opportunities”, remember that you’re not locked into only one method of preparing for the future. If you’re already maxing out your 401k plan each year, consider opening an IRA or even purchasing an annuity.
Weigh your risks carefully. It’s usually a bad idea to take on excessive risk. But without at least some risk, your retirement fund might not grow at the rate you had hoped. Remember that playing it too safe is a risk in itself; you might not accumulate enough money before retirement.
As always, we don’t recommend that you undertake any of these strategies before seeking expert advice. Come see us, and we can help you sort through your options and make a retirement plan the provides the income you will need for the rest of your life.