It wasn’t that long ago that Americans were looking forward to retirement. They were finally going to have some fun after decades of hard work. As the cost of living and life expectancy continues to rise, fewer and fewer people can expect a peaceful retirement. As many as one-third of people approaching retirement have no savings. These retirement planning tips can help reverse this troubling trend.
Start Saving Today
According to government data, more than one-third of Americans rely on Social Security as their primary source of income. While the popular safety net can be helpful, it doesn’t cover unexpected expenses. Retirees need to have enough money in their bank account to cover unexpected expenses. Whether you save a dollar a month or a dollar a year, the important thing is to do so consistently over many years. Regular contributions and interest payments will surprise you with the amount of money you can accumulate.
Reduce Your Expenses
There are ways to save money even if you don’t have many unnecessary expenses. You can save on your monthly bills by shopping around for cheaper auto, life, and health insurance. You should also check the cost of your internet, phone, and cable bills. You can also look online for ways to save money. There are many deals online, whether it’s groceries, clothes, or school supplies.
Contribute to Your 401(K)
Participate in a 401(k) plan if your company offers one, as most do. Not only do these plans offer greater savings than regular bank accounts, but they also allow your company to match your contributions. While not all employers are generous, more and more are becoming so.
Open an IRA
The right individual retirement account (IRA), designed specifically to build your savings, can be a great investment. A traditional IRA allows workers to make tax-deductible contributions. In addition, investment earnings can grow tax-deferred until withdrawn. Roth IRAs can also be funded with after-tax contributions, allowing funds and earnings to be withdrawn tax-free. These accounts can be complicated, so talk to a retirement planning professional to find out which IRA best suits your needs.
Delay Social Security
You’ll receive more Social Security benefits the longer you delay collecting them. Even if you defer benefits for only one year (age 62), you’ll get a big bump in your monthly checks. You can defer payments until age 70 to receive more income in later years. Full retirement is available at age 67.
Talk to Your Spouse
Last but not least, if your spouse is employed, it’s a good idea to talk to him or her about your retirement plans. As with your retirement plans, you should also talk about his or her retirement and pension plans. Combining your and your spouse’s retirement plans could cover most of your financial needs for the future.…