It is not uncommon to hear the story of someone over 55 with no savings, or very little. It is becoming a stark reality of today’s world. However, there are simple strategies to take the pressure off your retirement even if you have a debt or are not earning as much as you need to lead a comfortable life into your 80’s and beyond. Here are some of my tips:
Retirement Plan B
If you are already in your 50’s and nowhere near where you wish you were financially there is a solution. If you delay your retirement for a period of time you will reduce the pressure placed on your savings account. What I am suggesting is to not retire at 65. You could, depending on your health, put it off until you turn 70 or maybe even 75.
What this does is it reduces the number of years you need to cover when you are not working. Let me explain. The average lifespan is 85. Let’s say you retire at 65 you now have 20 years of retirement you need to be able to pay for through your savings. If you put retirement off until you reach 75 you now have just ten years you have to cover.
Another important part of the retirement Plan B is to reduce your debt as quickly as you can. Suppose you are still carrying a mortgage and you have chosen to delay your retirement to 75. Now you have extra time to use your earning years to beat down those debts so that when you do retire, your savings are going to be used up by you, doing the things you want to do instead of the things you have to do like bury a debt.
You should also be looking into a post-retirement career. What this does is continues to provide you will an income stream while semi-retired. The advantage here is that you keep earning, which reduces pressure on your retirement savings. You may be required to find something other than within your current career path, but even a part-time job “on-the-side” will provide some cash flow to add to your savings.
In fact, while you’re at it, once you ‘retire’ from your main career and move into post-retirement earning, you will have the time and flexibility to combine more than one part-time income creating multiple income streams. Your specific situation will dictate what your options are, but even with two different part-time jobs you will have time off and still generate earnings.
With these extra incomes, should you make enough to allow you to stow away a portion to feed your savings account, this is the time to do it. If you are currently 60 and plan on full-time retirement at 70 you have ten years to stash some extra cash and when you do finally retire from work you’ll have a nice little nest egg.
The biggest thing to carry into your retirement Plan B is the reminder to not be stressed out about what you are doing. The last thing you need is to be worrying about what to do when you’ve already decided on a few of the steps I’ve provided here for your Plan B.
The time is now to get started on this new plan as it will get you to where you want to be when you finally retire. All you need to do is decide to delay your retirement and once you choose the age you intend to finally stop working, work backwards from there to see what room you have for Plan B and build it accordingly.