Many people in their 60s don't have enough saved up to have a financially stress-free retirement. Individuals will small nest eggs run the risk of depleting their savings before all is said and done. But it’s not too late to take swift action to fund the retirement lifestyle you want. Here are some last-minute ways to boost your retirement finances.
Assess your situation. Even in the direst situations, most American workers will never completely run out of money in retirement. Most retirees will have some money coming in each month in the form of a Social Security payment. Figure out how much of a challenge it will be to live off of your Social Security payments alone. Then come up with a plan to make your other assets and income sources last as long as possible or to cut your monthly costs.
Cut back your expenses. One of the easiest ways to cut back without feeling deprived is to think of alternatives. Can you use the Internet or services such as Skype to make phone calls and cut out your land line? Consider using generics for prescription drugs or going on road trips instead of traveling overseas. Another way to save is to eliminate. You may have gym memberships, magazine subscriptions, and a movie budget that you don’t need and seldom use. Reducing your expenses will make your limited savings last longer.
Work part time. Not every part time job involves tiring hours with little pay. Begin by looking at all the hobbies that you have and see if you can generate some income based on them. This way, you won't hate every second of the work. If you like writing, for example, you can start a website that talks about your retirement situation. Or if you like to refinish old furniture, perhaps this hobby can be turned into a side business.
[Visit the U.S. News Retirement site for more planning ideas and advice.]
Delay retirement. One more option is to simply delay calling it quits. You will continue to generate income, can take advantage of company health benefits, and get more years to save for retirement.
Carefully manage what you have. When you are feeling cash strapped, a tempting solution is to try to make up for it by investing more aggressively. Yet, this is probably the last thing you want to do. Taking on more risk means you could run out of money even earlier. Instead, shop around to make sure you are getting the best return for the risk you are taking with the lowest possible fees.
Downsize. Your house can become a big source of capital to fund your retirement. If you've been diligently paying off your mortgage, chances are good that you will have accumulated a significant amount of equity in your home. By downsizing, you are not only reducing your maintenance bills, but you are also drawing out some of the equity that you have saved up through the years. For some people, downsizing alone may be able to turn your financial situation around.
Consider a reverse mortgage. Another option is to consider a reverse mortgage, where you essentially take out a loan based on the equity you've built up in your home. However, watch out for complicated fine print and high fees. Also recognize that you will have to stay in that home for the rest of your life or the loan becomes due.
Simplify your life. One of the best ways to feel happier is to actually simplify your life. You might like going to the movies, but perhaps you will find even more enjoyment if you start taking a walk around the park every day. When you no longer have to work all day you have more time to try all the free activities that your city has to offer.
David Ning runs MoneyNing, a personal finance site aimed at helping others change their habits for a better financial future. He suggests that everyone to sign up for an online savings account to get more out of our hard earned money.