Five Tips to Prepare for a Comfortable Retirement
Many Americans haven’t saved enough money to support them through their retirement
Most Americans who see retirement right around the corner lack strong convictions that their Golden Years will, indeed, be golden. One recent report1 indicates that workers of all ages are saving too little of their paychecks for retirement, and one in five Americans (21 percent) have NO retirement savings at all. Other findings validate people’s concerns about their financial future:
- One in three Baby Boomers (33 percent), the generation closest to retirement age, have only between $0-$25,000 in retirement savings.
- Three quarters of Americans believe it is "not at all likely" (24 percent) or only "somewhat likely" (51 percent) that Social Security will be available when they retire.
- Nearly half (46 percent) of adults have taken no steps to prepare for the likelihood that they could outlive their savings.
So, what can Baby Boomers do to catch up? What can workers nearing retirement do to enjoy a brighter, more secure future? While the numbers may be bleak, there are things workers can do, starting today, to enjoy a better, longer, more secure retirement.
Time to Catch Up
It’s time to take control of your personal finances. We’re living longer in retirement, and having enough saved and invested isn’t easy, but you can do it.
1. Start by figuring out how much you’ll need. Calculate what your monthly expenses will be in 10 years or 20 years. Don’t forget to factor in inflation, which increases prices and erodes spending power. Everything will cost more in the years ahead with inflation factored in.
2. Put off collecting Social Security. Yes, you may work a few years more, but your monthly Social Security check increases the longer you wait to start collecting. You can start collecting at 62 years of age, but if you wait until you’re 65, your Social Security check will be larger each month. If you wait until you’re 70 to start collecting Social Security, your monthly check will be larger still. Consult the Social Security website for online calculators.
3. Automate your retirement savings. Talk to your employer or your bank representative to set up an automated savings plan. With an automated plan, savings are automatically deducted from your paycheck or bank account and invested each month, or at intervals you determine with the help of your bank’s retirement advisor.
4. Pay down debt. Debt drains financial resources that could be invested in long-term vehicles to improve your opportunity for a more secure retirement. Pay down your credit cards. Pay off a second mortgage. Pay off your first mortgage faster.
5. Stop spending. A vacation can cost a few thousand dollars – money that could be invested for the future. So enjoy a stay-cation and save more each year. Maintain your car to make it last longer and eliminate a monthly car payment. Use that extra money to invest for future retirement.
Whether you’re still punching the time clock or enjoying retirement, you can improve your future, starting today, by saving more, spending less, and working with an investment planner at your bank to help you meet your goals for your retirement years.
Talk to the retirement specialist at your bank today. The more time you have to save for retirement, the easier it is to save. So start today, and enjoy a brighter future every day for years to come.
The information provided is presented for general informational purposes only and does not constitute tax, legal or business advice. Any views expressed in this article may not necessarily be those of Nevada State Bank, a division of ZB, N.A. Member FDIC