Brad Rhodes: Where can you find money for a secure and predictable retirement?
Posted at 12:00 p.m. on Thursday, January 26, 2023
You’re likely to be retired much longer than you think.
How long do you expect to live? Do you believe that you will live until the end of the Seventies? Are you sure you’re following the path of your parents, who were alive and well in the mid to late 80s?
The average common life expectancy (men and women combined) is around 90 years for more than 49% of the population. 20% of Americans live to be 95.
Depending on your unique perspective, it’s good or bad. This is good because many people want to live as long as possible, provided they are in good physical and mental health. However, a long life can be bad news when it puts you at risk of outliving your money in retirement.
Another thing to consider is that these numbers are AVERAGES. More and more people are hitting triple digits, and you could very well be one of them. There are tons of exceptions to the rule, especially if you benefit from great genes, have made an effort to stay fit and healthy, and have handled stress well.
Longevity is a possibility. That’s why it’s difficult to create a portfolio to help you maintain your current standard of living for more than 30 years after you retire. Having less money in retirement is a concern for retirees and pre-retirees. Almost every senior knows someone who has defied the odds and lived longer than expected.
Many retirees and pre-retirees had had someone in their own family who had gone through hardship and deprivation because so much was missing at a time when they needed it most.
The logical solution to not having enough money for retirement is to start earlier and save more. It’s not always easy to do, however. Many people can barely make ends meet and don’t have a lot of discretionary money to create retirement income. You may fall into this category and worry that you don’t have the money to set up a retirement account.
How to find money to fund a retirement plan?
Developing a savings and income planning mindset is valuable at any age.
Naturally, you might be on a tight budget due to your career path. Or, you might have family, medical, or debt issues that make saving difficult.
Fortunately, there are ways to free up some 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 your retirement.
- Debt restructuring. Review all of your debt, including student loans and consumer debt. You may be able to negotiate lower rates or pay down debt more slowly.
- IRA or 401(k) Ask your financial expert and tax advisor to see if you might be eligible to withdraw money from your qualifying plan without penalty. If you qualify, you can use this money to buy investments that give you higher interest rates. This option is available under Rule 72
- Live a simpler life. Making your car, major appliances, and other big-ticket items last longer can add up to thousands of dollars that you can use to fund your post-career life.
Regardless of your current financial situation, you can and should put money aside for a time when you no longer receive a paycheck. Starting early and being consistent, along with small lifestyle changes, will help you avoid common mistakes and achieve a better retirement lifestyle.
Brad Rhodes lives in Lexington and is a member of Syndicated columnists.