6. Delay all you can
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Foot-dragging is a great tactic for extending the life of your retirement savings. Hold off quitting work as long as you can. Wait to claim Social Security retirement benefits. Waiting helps delay the moment when you’ll need to crack open your nest egg, giving investments longer to grow and you more chance to contribute to them.
If you will have a financially tight retirement, leave savings untouched as long as possible. Stay on the job — whatever job you can get. A low-paid job, or a part-time job is better than no job since every dollar earned is one you’ve left in savings for later.
Here’s the evidence for delaying. Using numbers from the example above (in item No 2: “Pick a number”), here’s how much bigger your monthly retirement fund withdrawals could become by delaying them until age 70:
- $2,064 (instead of $1,835 a month at 65) if your nest egg is $339,000
- $3,097 (instead of $2,753 a month at 65) if your nest egg is $508,500
- “14 Ways to Get Bigger Checks From Social Security”
- “Ask Stacy: Do I Really Need to Wait Until Age 70 to Collect Social Security?”
- “A Social Security Strategy That Pays Off Big for Couples”
7. Wipe out debts
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All debt, and high-interest credit-card debt in particular, forces you to spend money on interest that you need for investing in retirement accounts or living in retirement. Set a goal to pay off debts, even your mortgage if possible, before retiring.
- “Ask Stacy: What’s the Single Best Way to Pay Down Debt?” (The inspiring story of a couple who retired $37,000 of their debt in a year.)
- “Extreme Financial Makeover: 30 Moves in 30 Days”
- Money Talks News articles about credit and debt
8. Radically shrink spending
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You’ll have to cut back on spending when you retire, anyway. If you start now, you can use the savings to fund your retirement.
A drastic cut in spending requires big decisions and determination. How would life change if you decided to spend no more than 30 percent of your income on housing? You may decide to move to a cheaper part of the country, or to leave the United States and move abroad. Spending less than you earn is the magic sauce that enables people to save, live debt-free and rescue shaky retirements.
“The three most powerful things you can do (to rescue your retirement) are to control how much you spend and save more, work longer and use your house as part of your retirement plan,” says Boston College’s Financial Security Initiative (and savings calculator).
- “7 Extreme Ways to Save Money”
- “How to Live Rent-Free (or Way Cheaper Than You Are Now)”
- “How to Survive When Your Income Drastically Drops”
9. Get help from your home
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If you own a home, the equity may well be your biggest source of wealth. The two most common ways to tap it are taking a reverse mortgage or selling the home and downsizing, investing the profit in a retirement account.
Maybe you don’t want to sell or take on debt. There are other ways to use your home as a retirement asset. For example, you could rent a room to a boarder or get a housemate — or occasionally rent part of the home to vacation travelers or rent it out while you travel — or live in a cheaper location.
- “Before You Get a Reverse Mortgage, Check Out These 15 Alternatives”
- “Feds: Beware the Sugar-Coated Reverse Mortgage”
- “Reverse Mortgages Have Changed: Is It Time to Take Another Look?”
10. Find a job with a pension
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Jobs with old-fashioned defined-benefit pensions — the type that pay retirees a set amount each month — are scarce, but they have not entirely disappeared. You could make it your mission to find one. Such benefits are increasingly attractive to job-seekers, finds a survey by global advisory company Willis Towers Watson.
- “7 Tips for Stress-Free Retirement Plan Investing”
- “Could Your Pension Disappear? 5 Steps to Protect Yourself”
- “Ask Stacy: Should I Buy an Annuity for Retirement Income?”
How’s your retirement savings coming along? Do you have ideas for others who are trying to build a nest egg? Share with us in comments below or on our Facebook page.