In an ideal world, it would be wonderful to be able to save 10 or 15 percent of your monthly income for retirement.
But the truth is that many people find it difficult to accomplish that. You’re not alone if you’ve reached retirement age with little or no money. According to statistics, 42% of Americans retire with less than $10,000. Here are a few choices.
1. Work Longer Americans are in the best physical shape ever. Although though 65 is the “traditional” retirement age, many Americans continue to work far past that age.
It can be rewarding to run a company that you are enthusiastic about. You can significantly increase your wealth by diligently saving if you work for 10 more years.
2. Utilize Your Government Benefits
Optimizing Social Security income by working longer is a benefit.
Your Social Security payout grows by 8% for each year you postpone taking it. Your Social Security benefit might increase by up to 32% if you continue working until age 70.
This has the potential to significantly speed up your retirement savings plan.
Insurance
Aside from Medicare and Social Security disability insurance, you may also be eligible for other government benefits when you turn 65. At 65, one becomes eligible for Medicare. To receive such benefits, sign up as soon as possible.
For health insurance, Americans in the US pay $10,000 or more a year. While most Individuals’ access to Medicare Part A is free, it can be a big financial boon.
3. Downsize
If you’re over the age of 65, chances are you don’t have any young children. Consider downsizing to a smaller home, or even renting out your home for a small apartment. It will save on maintenance, utilities, and create more income for retirement savings.
You can also probably save a lot of money on your trip and leisure expenses. Consider taking two domestic excursions instead of two international visits per year.
America is a large and beautiful country, and you may be amazed at what you may find within a short drive or flight. If you really want to go overseas, combine the two vacations into one.
In terms of entertainment, dining out is frequently part of a household budget. Consider making delectable meals at home.
Easy modifications are simple methods to save money for your retirement.
4. Invest in Retirement Accounts
Some individuals begin withdrawing funds from their retirement accounts as early as age 59 12 to avoid the 10% early withdrawal penalty.
But did you know that you can continue to contribute to an IRA until the age of 70?
Even better, if you have a Roth IRA, you can continue to contribute for the rest of your life. Retirement accounts offer a favorable tax structure that increases the value of investments.
You will not pay any yearly income tax on standard or Roth IRAS. This implies that your investment earnings can compound without you needing to withdraw funds to pay taxes on them. Furthermore, at the age of 65, you can make “catch-up” contributions. The IRS permits those over the age of 50 to contribute an additional $1,000 per year.