If you ever fantasized about leaving your job right on your 67th birthday and living a life of relaxation in retirement, well, the pandemic likely shattered that vision. These days, the combination of our country’s high inflation and an individual’s low savings mean many have lost confidence in their ability to retire.
Whether you’re rapidly approaching retirement age, or it still feels like a far-off pipe dream, it’s natural to worry about the possibility that retirement is simply not financially feasible for you. Here are some steps to take and plans to make now, so you can feel more confident about your retirement options down the road.
Decide where (and how) to live in retirement
When it comes to where you age, it’s not necessarily about downsizing—it’s about “right sizing.” For instance, you might find you can afford a nicer place if you move to a lower-cost area.
For those worried about the financial possibility of moving, you can look into subsidized housing for seniors. The availability of these units varies greatly between areas, and there’s often a lengthy wait after submitting an application. Do your research now and get an application in ASAP.
There’s no one-size-fits-all answer, but it’s never too early to look into all your options until you feel more confident about where you’ll be aging. If you plan to relocate, you may want to do it early before any health issues set in.
Get the most out of Social Security benefits
You can get bigger social security checks by delaying your payout. Although you have the option to start receiving payments as early as age 62, your Social Security benefit increases for every month you wait up to age 70.
If you were born in 1960 or later, your full retirement age for Social Security benefits is 67. If you start payments at that age, you’ll get 100% of what you’re entitled to...but if you can push payments off until age 70, they’ll increase to 124% of that age-67 payment, according to CNBC. Of course, waiting a few more years for a larger check also means you’ll receive fewer checks overall. You can learn more about the basics of Social Security benefits—including what factors may influence your payments—here. You may also visit the main Social Security website or call the department toll-free at (800) 772-1213.
Grow your savings now
If you do have a retirement account, work toward maxing out your contributions. The IRA contribution limits for 2023 are $6,500 for those under age 50, and $7,500 for those age 50 or older. While there’s no age limit for IRA contributions, you do need earned income—so you might consider the idea of retiring in stages to keep cash coming in.
If you don’t have a retirement account, now’s the time to start one. Just a few years of saving in a retirement account will have surprisingly significant results. Even if you’re starting from zero, any amount of tax-deferred savings are better than none.
Here are more ways you can retire when you have basically nothing saved for retirement.
