It is never too late to save for retirement. But, you may think what about retirement savings in your 60s. Is it too late for me? While it may seem like time to save is running out, it’s really just an excuse.
You or a loved one may might be in theapproximately 14 percent of people older than 65 years old who don’t have a retirement account. If so, there are things you need to do now in order to retire with a little peace of mind and money in the bank.
There is so much more to know about retirement and these articles might help!
- Seven Different Types of Retirement Accounts
- How to Free Up Cash to Save for Retirement
- Your Wake Up Call! Saving for Retirement
A Long Term Look
Once you retire, money stops coming in and only goes out. There is no way to avoid that. It is absolutely imperative that you create (if you don’t have one already) and adjust your financial plan for retirement. This means taking a hard look at spending habits.
Gather as much financial information as you possibly can on anything you spend money on – everything from grocery store receipts to monthly gas bills. Budget apps such as EveryDollar, Quicken or Mint can help you track spending.
Once you’ve established what you’re currently living on, it’s time to think about the future. Ask yourself, how much do you plan to live on? Does that total include trips to visit grandchildren or paying off a mortgage? Another thing you can’t ignore — how much do you need for medical bills? If you have a preexisting condition, this will need to be higher, so keep that mind.
Once you understand everything you are spending, start cutting your budget as much as possible. Have cable? It might be the time to cut the cord. Are you assisting your children with their bills? Stop that. You need to be saving as much money as possible. How much exactly? Aim for as much as 50 percent of your monthly income. Yes, we know that is a lot, but it is necessary.
A Health Savings Account (HSA) can help out immensely in retirement since there are tax-advantages to having one. Similar to an IRA, you can withdraw money for non-medical expenses (note: funds will be taxed as income) after age 65.
A Plan In Action
As you decide what the future holds and how you’ll achieve this, it’s worth remembering that the easy answers to your retirement concerns aren’t always the best resolutions. For instance, reverse mortgages may seem like a good idea but there’s more to them than initially meets the eye. They can often do more harm than good since the equity is merely a portion of your home’s worth. Also, reverse mortgages typically come with high fees and upfront costs.
Of course, you may be wondering about other sources of potential post-retirement income – namely, Social Security. Renowned financial expert Dave Ramsey advises people to act as if Social Security doesn’t exist when they’re planning for retirement so that it’s arrival is more of a bonus. However, if you know that these payments will be crucial, it’s best to wait until at least age 70 so you can maximize those payments.
Lastly, if your savings are between nothing and not nearly enough, consult immediately with a financial advisor. They will help you cut expenses and start saving at the levels you need to retirement comfortably, and often with a tried-and-tested plan. A good financial advisor can also help you diversify any investments that you or a spouse carries or give you a technique for properly maxing your saving options.
With retirement so close, action is the key word. If you’re proactive about not only putting money away, but also curbing your spending and making financial changes, you can start making plans for life after work.
No matter how old you are, it is never too old to be saving for retirement. For more advice on navigating financials or saving for retirement, click here for friendly advice from the CommunityAmerica Credit Union Savin’ Mavens.