No nest egg? Here’s how to retire anyway
We are told that we are supposed to save money – as much money as possible – for retirement, since social security alone will not be enough to pay our bills. But what if you’re well into your 60s, your paycheck offers virtually no savings, and you know you can’t keep working full-time for years to come?
While retiring without a nest egg is certainly not ideal, if this is the situation you are facing, know that it can be done. Here’s how.
1. Wait up to 70 years to apply for social security
Maybe your full-time income isn’t saving you a lot right now, and working a concert side to raise extra money just isn’t in the cards right now. If so, but you can stay in the job for up to age 70, it can automatically increase your retirement income by increasing your Social Security benefits.
For each year that you delay filing your claim for benefits beyond your full retirement age (which depending on your year of birth is either 66, 67 or 66 and a certain number of months) you will get an instant 8% bonus which will remain in effect for as long as these benefits are paid. This means that if you envision a full retirement age of 66 with a monthly benefit of $ 1,200, working until age 70 will increase your annual income by $ 4,608. So even if you don’t technically save that money in a pension plan, you get the same result.
2. Get a part time job once you quit your full time job
Maybe it is not possible to work in parallel while you are employed full time. But once you quit that job of 40 or more hours a week, you might find the idea of working a few hours a week relatively manageable, even if you’re older and your energy levels aren’t what you want. ‘he was using. to be.
Imagine you could earn $ 15 an hour and manage to work just six hours a week. That’s $ 4,680 more to work with on an annual basis.
Remember that the work you do as a senior does not have to be work in the traditional sense. You can take a hobby you love, like gardening or baking, and turn it into a opportunity to earn money. And while the extra money will certainly help you, just as important, working a little bit during retirement will give you something to do with your time, preventing you from expenses money unnecessarily.
3. Minimize your retirement budget
You will have to deal with some expenses in retirement that are pretty much inevitable, like housing and transportation, to name a few. But that doesn’t mean that you can’t take steps to reduce your major expenses, thus stretching your income to the max. You can still see on downsizing your living space, get rid of a vehicle you no longer need now that you’re not heading to a full-time job, or move to a cheaper part of the country to lower your bills generally.
Additionally, you might consider moving to a state that doesn’t tax Social Security if your benefits are your main source of income. the majority of states, in fact, will not tax your benefits, although you will need to consider the overall cost of living before you move in order to keep more of that money.
Retiring without a nest egg will not be easy, and it is certainly not the recommended route. But if this is the situation you are facing and extending your career for many years is not an option, then there are ways to make it work. You may have to compromise by living an extremely frugal life, but it’s still a much better bet than running out of money in your old age.