In my studies about retirement and pre-retirement, I have come across a lot of advice websites on how to retire when you have limited or no savings at all. I decided to compile an article on the best retirement advice I had seen on all of these websites. Hopefully I have compiled a good list for you, all in one place, so you can make your retirement decisions easier.
Facts About Retirement Savings
Here are a few facts about retirement savings, and life expectancy:
—42% of Americans risk reaching retirement age, without adequate savings to see them through the rest of their lives. From The Balance
—50% of the workforce in private industry has no private pension coverage.
—36% of workers report that they and/or their spouse have not personally saved any money for retirement.
—In 1940, the life expectancy of a 65-year-old was almost 14 years; today it is just over 20 years. This is from the Social Security Fact Sheet
Change Your Perspective
Those of us approaching retirement with little or no savings would do well to change our perspective on what we think retirement will be like. It is unrealistic for us to think we are going to quit everything and travel the world or hit the hammock in the back yard and do nothing.
- Let go of the idea of full-retirement. From where you stand right now, it’s a burden you can’t afford to carry.
- Assume you will be working for the rest of your life.
- Embrace that you are not alone – millions of others are in the same situation.
- Never be bitter toward those who can or have retired; bitterness is another burden you can’t afford to carry.
- Recognize that you – and your life – have value and meaning apart from your financial circumstances, and vow to live your life to the fullest.
Things You Can Do Now
Pay off dept: Perhaps the most recommended thing you can do is pay off your debt. Dept is costing you whatever interest rate you are paying. Credit card dept ranges from 18% to 24%. You can’t afford that for long, especially on a fixed income when you retire. So get out of dept and stay out!
Ask for a raise: Maximizing your income streams is key when you are nearing retirement.
Jesse Dickler from CNBC gives four steps to asking for a raise:
- Plan ahead
- Do your due diligence
- Be realistic
- If at first you don’t succeed…
Make sure to read the full article because she gives some excellent advice. If you keep it real and have a good justification for why you deserve a raise, the worst thing your employer will say is no. At that point, you’ve at least given them something to think about, and it allows you to think about your next steps as well–maybe looking for a new job if your employer isn’t willing to increase your pay. From DoughRoller
Keep working as long as you can: The longer you keep earning your salary, the better.
Save all you can now: Every little bit helps. Even if you just put away $20 per pay period, that will really add up over a year’s time ($1040!). So, keep putting away as much as you can.
Reduce spending: There are hundreds of ways to reduce spending, but here are a few that you may not have thought of:
- Consider selling your car and using ride-sharing services, to eliminate car payments and insurance bills.
- My husband and I carpool together. We have saved around $200 per month doing this.
- Discontinue your landline telephone and acquire the cheapest possible cell phone plan.
- Raise the deductible on your homeowners’ and car insurance policies, to lower premium costs.
- Choose generic products over name-brand merchandise.
- Making inexpensive home improvements that increase energy efficiency and reduce utility bills. For example: purchase a programmable thermostat or replace attic insulation.
- Turn your thermostat down a few degrees and wear warm clothing, and keep warm throws around your living space.
- If you can burn wood in the winter, do so. In my area, if you aren’t getting firewood for free, there’s something wrong with you!
- Buy in bulk, and put the extra food away for later.
- Consider getting rid of cable and satellite TV, and watch TV over the internet.
- Cook at home rather than eating out.
- Pack a lunch.
- Make your coffee at home and bring a thermos to work.
- Reduce your gifts to charity. If you are giving $20, just give $10. I know this sounds selfish but there again we need to readjust our thinking on what we can afford.
- Reduce money you spend on gifts. Talk it over with family and friends and come up with a strategy. Set a gift dollar amount limit, or agree to only home made gifts. One year our family made only home made cards for each other. It was a blast and cost everyone very little to participate. Consider a family experience instead of gifts.
Get a side gig: The sooner the better. Find a job you can do easily during your down time from your main job.
Consider downsizing your home: This will reduce your monthly payments, or even totally pay off a small home with the sale of your big house.
Things You Can Do WHEN You Retire
Consider a reverse mortgage: There are some great programs that will pay monthly and will allow you to retain ownership up until the last person leaves the home. This is a great way to unload the real estate once you have no more need for it as well. Then your children don’t have to deal with it, especially if they live far away.
Where you retire can make a big difference: Check the cost of living in states that appeal to you to be sure you can afford to live there. Check out this list ranking the states on how beneficial they are to retirement. How do you like South Dakota? It ranks the best on the list, with Hawaii, Georgia, North Dakota, Tennessee, Alabama, Virginia, Florida, New Hampshire, and Utah rounding out the top ten. These ratings are based on cost of living, and cost of health care, and a few other criteria.
Consider a Tiny House or an RV: If you want to travel around the country, consider bringing your home and/or accommodations with you. Living tiny in a tiny house or an RV saves you a lot of money because you are limited in space to buy things, and you can go where the work is. There are dozens of RV programs for senior citizens, such as Good Sam, that can help you plan trips, provide roadside assistance, and recommend great places to visit. Also don’t forget Work Camping, a lifestyle in which you live in your RV and work wherever you migrate to.
Things You Can Do Once You Retire
Senior discounts: Definitely take advantage of senior discounts. You can get a reduced price on all kinds of goods and services by just asking if the company has a senior discount.
Social Security: There are several schools of thought about when you should sign up for Social Security. To get your maximum benefit, you should wait until you are 70 years old. However, some would argue that taking your benefit and working part-time might be more beneficial. I myself am going to try to wait until I’m 70. This is something you should work through with a financial planner or accountant.
Medicare: Sign up for Medicare as soon as you’re eligible, to reduce out-of-pocket health care costs. However, be sure to shop around for your Medigap or supplemental insurance before you sign up for Medicare, so you know what you are getting into and what the costs will be.
Save in Retirement: If you can, save money while you are in retirement. Put aside as much money as you can. Continue living frugally. And try to keep expenses down.
Get a part-time job: Keep up the side gig you started before you retired, or get a part-time job to supplement your income.
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- Training is inexpensive
- You can start now, and continue through retirement
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Get started now, so you can enjoy your retirement. Please leave your comments and questions below, and thank you so much for visiting!