Any financial advisor or savvy investor will tell you that you should start saving for retirement as soon as you possibly can. Ideally, you want to begin when you’re in your 20s and make investments consistently throughout your entire career.
However, that doesn’t often happen. Life gets in the way. Emergencies surprise us. All too often, the thought of investing for the future doesn’t sound nearly as enticing as enjoying today.
If you’ve awakened up at 60 years old with no retirement savings to speak of, you’re not alone. But there’s still time to do something about it.
It’s now or never. If you want to have any chance of enjoying a comfortable and secure retirement, you have to act immediately.
Five Retirement Savings Tips for 60-Year-Olds
Every individual will have to develop his or her own investing strategy that takes that person’s individual circumstances into account. Still, these five tips should prove helpful for 60-year-olds who are playing catch-up.
Slash Your Lifestyle
The first step is to streamline your lifestyle. The time to indulge yourself and live it up is over (for the time being). You have to get serious about cutting your expenses so you can beef up your savings and investments.
You don’t have to go crazy about purging expenses, but every dollar you save is another dollar that could be invested. Even $500 per month would be a really significant move in the right direction.
You don’t have to do it all at once. Take baby steps and good things will happen.
Take Advantage of Employer-Sponsored Retirement Accounts
If your company offers some sort of employer-sponsored retirement account, such as a 401k, take advantage of it. Load up on this account; it provides tax advantages.
If nothing else, be sure to contribute enough to get any sort of match that your employer offers. This is basically free money that should be put to good use.
Focus on Income Streams
At this point, you don’t have a ton of time to let investments sit and mature. So in addition to putting money into an employer-sponsored retirement account (which will grow over time), you should look for investments that provide income in retirement.
An annuity, for example, would give you a three percent guaranteed interest rate on your money for the rest of your life. Granted, it’s not a massive return, but it’s a safe, low-risk place to put your funds.
Plan to Work Longer
We hate to break it to you, but your hope of retiring at 65 probably isn’t realistic. You’ll need to expand your horizon and plan to stay on the job until at least 70.
By expecting to work longer, you give yourself more time to invest and more time to earn interest on your investments. You also reduce the amount of time you’ll spend in retirement, and that enables you to preserve your nest egg a little longer.
If you earn $80,000 a year, an extra five years of work represents an additional $400,000 in earnings. That’s a huge difference!
Assuming you put that money to good use, this could significantly change the trajectory of your retirement.
Seek Out Professional Advice
There’s nothing wrong with picking and choosing a couple of investments on your own. With all the DIY tools, robo advisors, and education that are available online, it’s pretty easy to find good opportunities.
However, it’s always a good idea to seek professional advice – particularly if you’re trying to develop a brand-new retirement plan.
If nothing else, meet with an advisor and pay that professional to develop a few potential 10- and 20-year plans for you. That will give you an idea of which different directions you might go.
Take Baby Steps
You aren’t going to catch up on 30 years of investing in one fell swoop. It’ll take time to get your retirement account to the place it needs to be.
The goal right now is to put one foot in front of the other and make small, low-risk investments that set you up to be financially secure in retirement. This isn’t an ideal situation, but it’s a healthy start!
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