A penny saved is a penny earned. Or so the saying goes. Let’s face it there is a lot of truth to it. People are living longer, but having enough money for retirement is getting harder. Costs keep going up. While the dot-com bubble and the great recession could not have happened at a worse time for an entire generation of soon-to-be retirees. With that in mind, we want to take a look at some of the unique ways to get the money you need for retirement.
- Work Longer
Ok, this may not be the most popular option but many advisors believe this is the best way to get the money you need. In some cases, this might mean working until 70 or even later. But let’s face it. We are living longer and healthier lives, so working later has become a viable option for more people.
- Delay Filing for Social Security
By doing so, you can increase the size of your Social Security benefits by 30% or more. Delaying Social Security can also benefit your spouse. If the payments are larger, then your spouse’s survivor benefits will be bigger.
- Don’t Touch Your Retirement Savings
This might be reverse logic, but the longer you can hold off on touching your retirement benefits the more money you will have over time. For example, if you retired 5 years ago and withdrew 5% from your retirement account every year, you would have already spent about 25% of your portfolio. However, if you were able to reduce the withdrawal rate to 2% or less, then you would still have more than 90% of your portfolio available. To make this happen, you should choose investments which pay regular dividends. This way you can live off the dividends and not the principal of your retirement fund.
- Cut Out the Fees
Most people don’t realize it, but the fees they pay to investment managers really add up over time. According to CNBC, high fees are eroding many retirement accounts. This is money that should be going into your pocket instead of the people managing your account. Granted, fund managers have a stressful job. But the fees paid to them should be fair for you as well as them.
- Get a Reverse Mortgage
For many people, the most valuable asset they own is their home. So why not look into how you can either freeze your monthly mortgage payment or take cash out of your home today and pay later. Reverse mortgages can be a good deal, but you need to be over 62 and show that you can pay your utilities, taxes, and insurance. If you want to find out more about reverse mortgages work,especially the interest rates, then check out this Reverse.mortgage – Interest Rates Q&A.
- Cut Your Losses
When your stockbroker or investment advisor calls and starts talking about dollar-cost averaging, then it is time to hang up. Yes, it does work, in theory, and if you have enough money then dollar-cost averaging might work for you. But if you work for your money, then you need ways to make your money work for you. This starts but cutting losing investments. Cash out while you can and look for better places to park your money. This way you will end up with more over time.
- Look at Your Tax Bill
Again, it’s your money and you work hard for it. One way to have more money for retirement is to look at ways you can cut your tax bill. This means looking for tax-exempt or deferred investments. Also, look at what other deductions you can take. For example, business expenses or charitable donations. Every penny adds up over time, so keep your receipts and give them to whomever is preparing your taxes.
- Stop Doing Things That Don’t Work
Do you know the definition of insanity? It’s doing the same thing over and over while expecting the same results. While Einstein probably did not say this, it does make a lot of sense. If you want to get more money for retirement, then you really need to look at every penny you make and every paper you spend. Ask questions about what you are spending and think long and hard if you need to buy that something. Sure, it might benefit you today. But the money you spend today could be used for your retirement.
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