Seventy-six million Baby Boomers are just around the corner from retirement. Unfortunately, some of them will be in for a horrible surprise when that retirement day arrives. Surveys show that the average pre-retirement Boomer only has about $9000 per year in retirement income headed their way, and a shocking one-third of Americans say they have zero retirement savings.
That is not exactly a situation you’d want to find yourself in when you hand in that note to your employer, giving your final notice. The saying goes that it’s never too late to start saving, but for those who are about to retire and literally have no savings at all, well, the sad news is that it kind of is too late.
Knowing that you have savings ready to access when the time comes is one thing, but making sure you’ve taken into account the bite of it that Uncle Sam will take and other factors that could affect your lifestyle in your golden years is another thing entirely.
Here are some strategies for a smarter retirement:
In your early years of retirement, you’re likely to have more energy to expend during all the newly-found free time. Be aware of this as you plan ahead, and be sure to save enough for any travel and other costly activities you may want to take part in.
Retirement planning isn’t just “putting X amount of dollars away.” The way to predict your retirement future is to create it - that is, be very clear about your goals. What will your lifestyle be like? What do you want to accomplish? How will you fund your activities? Will you work part-time to support these goals?
Stabilizing your finances through reduced spending is a smart strategy, no matter how close you are to retirement. Cutting out needless expenditure is a lot easier than you’d imagine. For example, a large number (about 90%) of Americans don’t like to cook and instead spend thousands on dining out. Good news for the restaurant industry, but not so good news for the Americans who spend over $3,000 on those meals each year.
Structuring a conservative budget and sticking to it is an antidote for out of control spending and debt. When it comes to retirement, you will have established good habits and more than likely have some extra cash at your disposal.
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