Read This If You Can t Possibly Save Enough for Retirement
Below is a MRR and PLR article in category Finance -> subcategory Investing.
Strategies for Late Retirement Savers
Are you worried about not having enough saved for retirement? Here are three creative strategies from CPA Stephen L. Nelson that might help you overcome this challenge.
Saving as a Young Adult
Saving for retirement is more manageable when you begin early. For instance, investing $5,000 for a newborn can grow to over $100,000 annually in today's dollars, assuming a 12% annual return with 3% inflation.
Note: While small-company stocks might deliver 12?"13% average returns over time, they can be quite volatile in the short term.
Challenges of Late Savings
However, if you start saving later in life, things get trickier. Trying to build enough savings at age 60 for a $25,000 annual income by 65 may mean saving more than you earn annually.
If you're in your 50s or older and haven't saved due to expenses like college or divorce, it's not too late. Here are some practical approaches:
Defer Retirement
Consider postponing retirement. By continuing to work, you can rely on your income instead of savings to support yourself. This doesn’t mean staying in the same job forever. If you're tired of your current role, explore new opportunities. Teach at a community college, join the Peace Corps, or work at a daycare center where you can make a positive impact.
Extend Your Working Years
Another option is to work a few years longer than planned, perhaps until 67 or 69. This extra time allows your investments to grow and can significantly increase your retirement benefits. An extended working period can also help you pay off major expenses like a mortgage.
Embrace Frugality
A more unconventional approach is rethinking your lifestyle. Consider living more frugally. The book "Your Money or Your Life" by Joe Dominguez and Vicki Robin offers valuable insights on this philosophy. By spending less while you're still working, you can increase your savings significantly over the years.
These strategies can help you cope with the challenge of saving for retirement later in life. Embrace these ideas to secure a more comfortable future.
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