If you’re counting on Social Security and your 401(k) to carry you through later life, Jean Chatzky has some sobering news, according to TheStreet.
The former financial editor for NBC’s Today show, now with AARP, warns that many Americans risk draining their savings too soon — and relying solely on old strategies may not be enough anymore, TheStreet reveals.
Her message is timely. Rising costs for everything from groceries to utilities are chipping away at people’s ability to save.
TheStreet reports that Chatzky believes today’s approach could come up short without a few important adjustments.
1. Delay for bigger Social Security checks
Most people know they can claim benefits at 62, but Chatzky cautions that filing early can reduce monthly income, TheStreet notes.
For those anticipating a longer lifespan, patience pays off — she suggests holding off until age 70 to receive the maximum possible benefit.
For married couples, Chatzky suggests the higher-earning spouse should wait longer to claim benefits, especially if the other partner is expected to outlive them, TheStreet reports.
This strategy helps ensure greater long-term financial support.
She also points out the upside of continuing to work while drawing Social Security — whether to stay financially stable or to remain active and connected during retirement.
2. Automate savings to make money invisible
A 401(k) can be powerful, but only if contributions happen automatically and consistently.
In her book Money Rules, Chatzky calls this the “invisible money” method, TheStreet highlights. The concept is simple: when money comes out of each paycheck before you ever see it, you’re less tempted to spend it.
She encourages people to go beyond workplace plans. Set up an automatic transfer right after payday to move cash into an account that discourages withdrawals — like a 529 college fund, IRA, or high-yield savings account.
Even an online savings account without an ATM card can help build a buffer between you and impulse spending, keeping your long-term goals on track.
3. Draw your money map
Vague retirement dreams don’t cut it anymore. TheStreet shares Chatzky’s view that having a clear, detailed plan makes a huge difference.
She explains that people who spell out exactly what they want — such as retiring at a certain age, paying off their mortgage, enjoying a club membership, or traveling each year — tend to save more than those without a specific roadmap.
This plan shouldn’t stay static. As your life changes, update your strategy to reflect your new vision. You might realize your current home isn’t where you want to retire after all. When that happens, update your plan to match your new vision.
Without this direction, everyday expenses and temptations can easily throw you off track. One missed contribution here and there can snowball into years of lost progress.
Move fast to protect your future
Ready to take action? These steps reflect Chatzky’s advice, detailed by TheStreet.
- Boost your 401(k) contribution. Log into your employer’s benefits portal and bump up your contribution rate. You’ll barely notice the difference in your take-home pay, but compound growth could turn this small change into major savings. If you’re not capturing your full employer match, prioritize that.
- Map out your Social Security strategy. Run the numbers on your projected benefits at different claiming ages. If you’re married, look at scenarios where each spouse claims at different times. According to Chatzky, understanding these details could reshape your entire retirement timeline.
- Set up one new automatic transfer. Pick an amount you can stick with and set up an automatic move from checking to savings each month. Starting small builds the habit, whether it’s into an IRA or a regular savings account. Choose an account without easy access to create that protective barrier Chatzky recommends.
Relying on outdated advice isn’t enough anymore. You can better protect your future by timing Social Security wisely, saving automatically, and updating your plan.
The real question is whether you can afford to wait any longer.
Add a Comment