If someone is over the age of 50 with less than $100,000 in retirement savings to his or her name, then there are a few key things that person should be doing to make sure that retirement will not be a burden when it comes in the next 10-15 years. These include determining a realistic retirement age; finding out what role Social Security will play in retirement; and finding a way to minimize late-life expenses.
This is according to a column published at the Motley Fool, going over each potential tactic that is designed to help someone approaching retirement become better prepared for life on a fixed income.
Determining at what age you can feasibly retire is an essential part of the process for someone in their 50s, because while it may make financial sense to put off retiring as long as possible to keep money coming in, there could be physical limitations on that approach which naturally accompany aging.
“Approximately 52% of workers say they intend to continue working past 65, and in some cases never retire at all, according to a report from the Transamerica Center for Retirement Studies,” the column reads. “But that same report also found that around one-quarter of workers had not taken any steps to ensure they could continue working, such as staying healthy, performing well at their job, or networking.”
Looking at the big picture before making such a determination is important in order to keep yourself in good health. This goes hand-in-hand with the second tip in determining how large a role Social Security will play in funding post-work life.
“You likely won’t have to rely on your savings for all of your retirement income, because most retirees are entitled to Social Security benefits,” the column explains. “But your monthly checks are only designed to replace around 40% of your income, so you may not be able to depend on them as much as you think.”
Keeping a full view of the full monetary picture of a retiree is very important, and bleeds into the third — and perhaps most reverse mortgage-relevant — tip: minimizing expenses later in life as much as is feasibly possible.
“Reducing expenses could mean simply cutting back on nonessential costs like takeout or travel. Or, you could make more significant changes like downsizing to a smaller home or relocating to a more affordable neighborhood,” the column says. “If you can make these changes now, you may be able to boost your savings significantly. But even if you wait until you retire to make budget cuts, reducing your expenses can still help your savings last longer.”
Read the full column at the Motley Fool.