For how long do you think you will live? Do you believe you’ll live into your late 70s? Are you confident you’ll follow in the path of your parents, who were alive and well into their mid to late 80s?
The average joint life expectancy (men and women together) is approximately 88 years for over 49% of the population. A full 20% of Americans live to age 95!
Depending on your unique perspective, that’s either good news or bad news. It is good because many people want to live for as long as possible, provided they are in decent physical and mental health. However, a long life can be bad news when it puts you at risk of outliving your money in retirement.
Something else to consider is that these numbers are averages. There are many exceptions to the rule, especially if you are the beneficiary of excellent genes, have tried to stay fit and healthy and have managed stress properly. More people are hitting triple digits, and you could very well be one of them.
Longevity is a possibility. Therefore, creating a portfolio to help you maintain your current standard of living in 30-plus years of retirement is challenging. Having less money in retirement is a concern for retirees and pre-retirees. Nearly all seniors know someone who has beaten the odds and has lived for a longer time than they planned.
Many retirees and pre-retirees had someone in their own families who went through hardship and deprivation because they ran out of money at a time when they needed it the most.
The logical solution to not having enough money for retirement is to start earlier and save more. That is not always easy to do, however. Many people are barely making ends meet and do not have much discretionary money to create retirement income. You may fall into that category and worry that you will not have any money to build a retirement account.
Developing a saving and income-planning mindset is valuable at any age.
Understandably, you might have a tight budget due to where you are in your career track. Or, you might have family, medical or debt issues that make saving a tough proposition.
Fortunately, there are some ways you can free up cash or find the money you never knew you had, to fund a retirement plan. Here are three things you can do right now to free up money for retirement.
No matter your current financial situation, you can and should set aside money for a time when you will no longer get a paycheck. Starting early and being consistent, along with small lifestyle changes, will help you avoid common mistakes and achieve a better retirement lifestyle.
Here is a word to the wise. Before making any decisions about where and how you invest your retirement money, always consult a licensed and authorized professional.
Dustin Settle, director of P.A.McGavick & Associates LLC in Boise, helps people navigate the retirement planning process. He is a member of Syndicated Columnists, a national organization committed to a transparent approach to money management.