Yep, times do change, don’t they. I’ve been disgusted for years by many of the head in the sand, sell Wall Street and “Massive Insurance Co.” plans to seniors who didn’t need them approach of this gigantic marketing giant. I’m still not a member, and likely never will be. But as my old friend Par Warhoe always said, “Even a blind hog will find an acorn once in a while”.
Social Security Alone Isn’t Enough
Checks from Uncle Sam account for just 40 percent of income for those 65 and older.
For pre-retirees, this is a wake-up call. Since Social Security doesn’t supply enough income for people to get by financially for even two weeks of each month, how do you make up the difference? According to the EBRI study, pensions and annuities account for about 20 percent of income for the over-65 population, though this percentage may decline as companies terminate pension plans and taxpayers object to generous benefits for public sector employees.
The upshot is that people over 65 will need to rely on earnings (my emphasis)and personal savings to meet nearly half of their retirement income needs. It’s a scary thought, but one that needs to be confronted.
Develop a game plan
Start by figuring out where you stand right now. Use AARP’s Retirement Nest Egg Calculator to crunch the numbers on your current savings and your future income needs. If you come up short — as many people do — think about ways to close the gap, perhaps by increasing your savings and prudently investing those funds that are earmarked for retirement. (or developing a second income, perhaps right from the chair you are sitting in now as you read this) …
It’s not too late to get started
If you’re rapidly approaching retirement age, or find yourself forced to retire early due to job loss or health problems, here are some last-minute strategies to close the gap:
- Downsize. If you can get by with a smaller residence, downsizing (or renting) can free up needed funds and reduce your living expenses.
- Relocate. Moving to a lower-cost locale in the U.S. or overseas (like the Philippines, maybe?) after retirement can also cut your cost of living.
- Put off retirement. You can increase your savings, perhaps dramatically, by continuing to work, if you’re able to do so. (or shifting your focus into an online source you can work from anywhere)
- Delay Social Security. Delaying Social Security benefits can result in a higher benefit check for the rest of your life.
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