Although the wise act of saving for retirement is shouted from the rooftops, it’s not uncommon Realizing you’ve reached retirement without enough savings can send you into a whirlwind of a panic.
Despite being in a tough spot with your retirement options, you’re not at a dead end just yet.
for people’s retirement planning to get off-track.
Let’s just face it, life doesn’t always follow our playbook. Consequently, you may have withdrawn more from your retirement saving than you wanted to during an emergency, or you were not been able to save what you intended.
When the time comes to hang up your hat, though, it’s important to know exactly where you stand in terms of finances.
If you’re worried about coming up short, here’s what to do.
Determine How Strong Your Financial Legs Are
First things first, you need to assess your situation. How much money do you need? How much money do you have? Look over what debts you have, what you have in savings, and how satisfied you are with your current lifestyle.
Review these basic questions and put the answers on paper. Often, seeing your financial situation within a ledger helps to put everything in perspective.
Delay Retirement for a Few Years
If you’re like most people, you’re probably looking forward to retiring. Nevertheless, there aren’t any hard and fast rules dictating when you actually have to stop working. And further still, studies support that continuing to stay active by working can actually prolong your life.
So when your retirement savings are coming up short, consider working for a few more years. These years will give you more time to beef up your retirement funds and probably keep you more chipper as well.
Play a Strategic Game of Catch-Up
If you do choose to keep swimming in the employment pool, do so wisely. For instance, take advantage of your company’s matching 401K contribution program. And max it out!
It’s basically free money that you wouldn’t have access to otherwise. So grab it while you can. Not only does this strategic game of catch-up help you out financially, but it decreases the amount of time you’ll be withdrawing from your funds.
Be a Risky Investor
According to most financial advisors, decreasing risk seems to be the name of the game for those nearing retirement. After all, the ultimate goal is to be financially secure when you’re ready to retire. A big enough dip in the market could put a wrench in all your plans.
Still, when you don’t have enough in your retirement savings, being a risky investor may be your best bet. Consider, for example, the higher the rate of return for long-term investments the bigger the short-term dips. So, basically, if you can endure the mental anguish of temporary financial loss, you can reap big rewards later.
Opt for a Slow Withdrawal
When the time comes for you to actually start withdrawing from your retirement portfolio, do so at a slow pace. For instance, if you only withdraw 4 percent every year, you’ll stretch your retirement funds over a surprising time span.
Keep in mind that if you withdraw anything over 5 percent, you will most likely outlive your savings.
Find Another Source of Income
Another common strategy to increase your retirement portfolio is to find other sources of income. For instance, you could downsize, get a reverse mortgage, or turn to your HSA (Health Savings Account) for additional funds.
Plus, consider creating passive forms of income during your retirement. Peer-to-peer lending has become increasingly popular nowadays. You could also rent out property or even start a business on the side.
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