Retirement is a time for relaxation, travel, and enjoying the fruits of your labor. However, many people find themselves struggling financially during their golden years due to inadequate retirement savings.
The average retirement savings for Americans in 2023 is estimated to be $142,893. While some cost of living can be supplemented with Social Security, the average monthly benefit amount in 2021 was $1,543–which will hardly cover basic living expenses like housing or food. This is leaving a lot of retirees in a troubling place where, even without luxuries, they may find themselves outliving their retirement savings.
With rising healthcare costs and an uncertain economy, it’s more important than ever to plan ahead and secure your financial future. Here are a few ways you can do that:
Start Investing Early
One of the most effective ways to fund your retirement is by starting early and contributing regularly to a retirement account such as a 401(k) or IRA.
These accounts offer tax benefits and compound interest over time, allowing your savings to grow significantly. Aim to save at least 15% of your income each year toward retirement.
Invest Wisely
Diversifying your investments across stocks, bonds, mutual funds, and real estate can help mitigate risk while also maximizing returns. It’s also essential to monitor your investments regularly and adjust them as needed based on market trends and your own personal goals.
Keep Your Future Health In Mind
As you get older, your health will start to decline–it’s just the reality of aging. And as prices rise, more retirees are finding that health care costs a lot more than they’d expected.
While Medicare typically covers only about half of all healthcare expenses in retirement, retirees can still be left with significant out-of-pocket costs. Consider investing in a Health Savings Account (HSA) or long-term care insurance early to be able to take care of yourself later.
Delay Your Retirement & Downsize
It’s never too late to prep for retirement, but the longer you do, the more drastic your options become. One option is working longer – delaying retirement allows you to continue earning income and contributing to your retirement accounts while also increasing your Social Security benefits.
Another option is downsizing – selling a larger home or car can free up funds that can go into your retirement fund. Of course, both of these options may not be possible due to health, family, or other issues, so it’s best to get started early.
Consider A Reverse Mortgage, Too
In addition to the other strategies outlined, homeowners can also consider using their home equity as an additional component of their retirement plan. One option is a reverse mortgage, which allows homeowners aged 62 years or older to access the equity in their homes. Unlike a regular mortgage, there is no principal or interest payment, which means there is no strain on monthly cash flow. All borrowers have to do is pay their taxes and insurance, as well as maintain the property.
And these are just a few of the ways to add a little monthly cash to your retirement! You could also pay off existing mortgages, receive additional income from equity, have a line of credit on reserve, or a combination of all of the above!
Securing financial stability during one’s golden years requires careful planning early on, along with disciplined saving habits and wise investment choices, and America’s Mortgage Resource is here to help. Don’t wait until it’s too late to realize you don’t have enough saved; contact us today to start looking at your options, and you can have a neat nest egg ready by the time you’re ready to quit work for good.