Several personal financial advisors will tell you the most beneficial way to save for retirement is to begin young and consistently put away a percentage of your earnings in a retirement savings plan such as an Individual Retirement Account. You have certainly seen the retirement calculators that show how even a $2,000 a month investment grows to a large retirement nest egg if you start saving at age 25. And some people surely do this. But if you're like several of us, your retirement planning was not so judicious, and now you're trying to find some last minute possibilities for a comfy retirement.
On one hand, you could save much more and try and build your retirement nest egg. But that isn't always viable for some. A lot more pressing objectives, like paying your home loan and health care bills, or helping out your youngsters and grandchildren, may possibly be stretching your budget. Around 58% of Americans age 55 and older have saved less than $100,000 for retirement, according to the Employee Benefit Research Institute's newest Retirement Confidence Survey. Just 19% have saved $250,000 plus. So you see, retirement planning failures are common.
That means you may need to adjust your expectations for retirement. And one method to do that is to contemplate not retiring - or retiring later. It might sound depressing, but it doesn't mean giving up laid back days with the grandchildren or on the greens. You could merely delay your retirement-or work part-time in retirement.
Of course, it's essential that you eliminate any wasted expenditures:
- Does one need the $100 per month health club or will the $19/month health and fitness center allow you to stay just as fit?
- Should you even now be giving your 38 year old son money?
- Would you enjoy holidays any less if you stay in the $150 per night inn and not the $250 per night accommodation?
- Does one actually need that lasik procedure or tummy tuck or hair replacement?
- Isn't that bistro where you can get a good meal for two for $35 just as satisfying as the place where you shell out $120?
- Does one use 2000 minutes on your cellular plan or need to view 240 channels on your cable TV?
You get the idea that there are likely hundreds if not thousands of dollars a month that are thrown away and this waste can make retirement seem to be an impossibility. Look over the credit card statements from the last three months and see how much "retirement gold" you can find.
Putting off your retirement can significantly affect your retirement finances - not just because each year is an additional year to save income, but simply because there's also one less year that you have to live off your retirement fund. According to a March 2006 report from the Center for Retirement Research at Boston College, Americans who delay retirement by just one year would boost their annual income in retirement by $1,317 to $2,402 annually. Those who delay retirement by 5 years would experience their annual retirement income increase by $14,888.
To consider this in more basic terms: the $1 from your retirement pot that you don't shell out today grows to $1.05 at 5% interest over the next year. So by doing work that extra year and not spending that $1 from your retirement nest egg, you have permanently increased your standard of living from your portfolio by 5 percent.
Working part of the time in retirement also doesn't have to be an experience you dread. You could take part-time work hours as a consultant in an company you know well, or you can pursue a profession you always dreamed of - for instance, working with children in a library, or helping out at the club house on a golf course (which may also bring about free of charge tee times!).
How much can you save by postponing your retirement? Our retirement calculator can show you.
Campers 4 Auction says
Very interesting post,especially now in this day and age people are living longer retirement plans is a must
pdf books says
in my opinion savings for retirements is absolutely must. People should more care by themselves rather than expect help from governement. Thanks for nice post.
James says
It's never too early to plan for retirement, unfortunately that's the mistake many young people make. I was given advise by a financial and pensions adviser to start a plan when I was eighteen. Just like many other young people I chose to ignore that advise and refrained. I am now 41 and don't have a personal pension plan. When I think of how much pension fund I could have had by now if I started when eighteen, it's depressing.
FinallyFast.com says
"Even a $2,000 a month investment grows to a large retirement nest egg if you start saving at age 25"
While the financial planning side of this is common sense, how many 25 year olds are there today that have $2,000 a month in discretionary income to put into savings? I'm in my late 20s now and I make just over $2,000 a month. There is no way I can set that amount aside for savings. It kind of concerns me really. I guess I should take not of these last minute retirement options now!...either that or seriously consider asking for a raise.
Donna Ostrus says
Very truthful post on last minute retirement planning. You write like a gentleman I know.
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retirement calculator
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gift certificate templates says
The statistics on retirement planning in America are interesting. The retirement planning options is something to think of. It is not wise to put off your retirement plans. Good post
Aquanomi says
"...now you’re trying to find some last minute possibilities for a comfy retirement." I would guess that this sums up the majority of us. It always seems so far away when you're young and too close when you get older. Hindsight is a wonderful thing...!
friv says
"To consider this in more basic terms: the $1 from your retirement pot that you don’t shell out today grows to $1.05 at 5% interest over the next year. So by doing work that extra year and not spending that $1 from your retirement nest egg, you have permanently increased your standard of living from your portfolio by 5 percent." If you do that, then you end up with a smaller buying power. The best thing to do is to invest in long term assets: land, food, gold!
Glenn says
Great article. I don't dread working part time after retiring, but I sure would rather not. I'm eliminating wasted expenditures. Have cut $350 a year of the power bill by eliminating standby.
Translation Services UK says
It's getting even worse in the UK to plan for retirement as retirement age is set to increase and national pensions are set to decrease over the long term.
Tribulus Terrestris says
Our children are now becoming more frugal than ever because of this recession. This is a good thing because they will understand the value of money and how saving up for retirement early will help them later on in life.
Randy says
I recently listened to Jack Canfield's audio program - The Success Principles. In that program he said that we should set aside a portion of our income to be invested in a investment portfolio of our choice. Whether stocks or mutual funds it doesn't matter as long as we start doing it. The earlier, the better and it should be automatic. Imagine if every month, an automatic amount of lets say....$500.00 is invested to our mutual fund and we do this for the next 15 years. With the power of compounding and the performance of the mutual fund in the next 15 years.....a more comfortable retirement scenario can be seen.
MyLeadSystemPro says
Nice post.Thanks for sharing useful information.I think Increasing your retirement income is a top priority for people planning to retire and current retirees.
Womens Basketball Shoes says
I'll consider these retirement options you just shared. Thanks for sharing this wonderful information!
Marketing Tools says
Yes, putting off your retirement can indeed provide you more time to save money. This is why I always advise people to start saving only in order to have enough time to accumulate an interesting income.
Power Tool Spare Parts says
very good article this, its amazing how much money you save by actually sitting down and questioning the real value of certain purchases. I brought my cable TV subscription down to minimum package and have cut-out needless junk food. I have saved over a $1000 this year and that was before I stopped smoking!
Your Own Retirement says
It really comes down to figuring out how you can cut down on monthly costs and still try to maintain your lifestyle. If you really want to put money away for savings you might just have to change your lifestyle a bit.
Tina Bychkova says
Thank you for the article. Retirement plan is surely the thing to take care in advance. And the earlier, the better
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Great article. retirement calculator very good
vince says
very helpful. though i'm not yet about to retire, it is good thinking about the future.
Chris Williams says
Nice post. Unfortunately, I think many of us won't be retiring in the way we'd like. As for myself, I foresee doing a bit of freelancing part-time during my retirement years.
Elektrokamin Garvens says
Why retire if you enjoy working?
Manual Pasta Machine says
You could merely delay your retirement or move out of the country to establish residency where the cost of living is alot less. Thousands of Americans are doing this every year, resulting in better health care, less stress, more bang for your buck. Check it out. There are great places like, Panama, Belize, Uruguay, Spain, Ireland and Croatia.