It can be downright scary if you realize you don’t have enough to retire. What can you do to create more retirement income?
The Vanguard Group, an investment management group who provides world-class record keeping for Christian Brothers Services, recommends a few tips. Try to put into practice a few of these steps to a more comfortable retirement.
Compiled from Vanguard’s lesson, “How can I have enough for retirement,” For the full lesson visit, https://retirementplans.vanguard.com/VGApp/pe/edu/catalog/how-can-i-have-enough-retirement-income/3?gh_sec=n
Demolish your debts
You can live on less if you have less debt. So start paying off debts before retiring.
- Knock off little debts first. Quick progress early on can build confidence.
- Pay down bigger debts. Next, target your high-interest-rate debt. This is most likely a credit card. Pay extra until you zero out the balance. From there, move on to the debt with the next highest interest rate. Repeat the process until all your debts are paid off.
Each debt you’re able to eliminate is one less bill to pay in retirement and that can give you piece of mind.
Catch up on retirement savings
If you have not saved enough for retirement early on in your career, you still have an opportunity to increase your savings before you reach retirement age.
If you’ll be age 50 or older this year and your employer’s plan allows catch-up contributions, you can save up to $25,000 in the plan in 2019. That’s $6,000 a year more than workers under age 50 can save.
Earn money doing what you love
No one says you have to retire at the traditional age.
Continuing to work is a good way to stay active and socially engaged. Plus, it might be the chance to change gears, especially if you work at something you are truly passionate about.
Love tennis? Maybe you could give lessons. Or maybe a part-time job with a favorite non-profit would be a fulfilling way to help make ends meet.
Continuing to work can reduce your Social Security benefits if you start your benefits before your full retirement age. So be sure to read the rules from Social Security. https://www.ssa.gov/pubs/EN-05-10069.pdf.
Embrace the simple life
Some people enjoy living simply in retirement. And they live on a lot less money in the process. Three ways to reduce costs:
- Downsize—For most of us, housing is our biggest expense. Retiring to a smaller home usually means lower property taxes and maintenance costs.
- Do it yourself—Plant a vegetable garden. Paint the kitchen. Greater self-reliance not only lowers the cost of retirement, it can be highly gratifying.
- Have only one car—In retirement, many people manage just fine with only one car. Between insurance, fuel, and maintenance, cutting one car out of your budget could save you thousands.