Crack the Information Code
Paralysis is understandable. Many people have limited formal education on the subject of investments or investing but that does not mean you can’t take the lid off of your learning and use the numerous online learning tools to expand your knowledge and break out of the pack to be more investment and retirement planning proficient! Take this as a compliment, you don’t need to be an investment expert to get started. Instead, start saving, keep saving, and learn as you go.
Pick a Number
Set a savings goal. It may change later, but pick a number now to get going. To fund a nest egg, many times I suggest that people consider saving 10 to 12 times the amount of their last full year of income. By that logic, if you expect to earn $60,000 in your last full year of work, you should set a savings goal of between $600,000 and $720,000.
Emancipate Your Adult Kids
Sit down with grown children and tell them what you are facing. It’s a tough conversation. But laying your financial cards on the table gives them information they may need to plan their lives. It also may let you get a sense of whether living with them or expecting any support from them in your old age is a possibility.
Also, if your retirement is in peril and you are helping your adult kids financially, you’ll have to stop. There are other good reasons for withdrawing your support besides your money woes. Supporting adult kids can undermine their self-sufficiency.
Think Carefully About Divorce
If you’re on the fence about ending your marriage, understand that getting divorced deeply wounds couples’ finances. This is especially true for women, because on average they earn less and often drop into and out of the workforce for family reasons, contributing less to Social Security and retirement funds. But divorce affects men’s finances, too.
Divorcing at an older age can make it especially hard to recover. Think realistically about the financial implications for yourself, your children and your retirement.
Delay All You Can
Hold off retiring from work as long as you can. Also, wait to claim Social Security retirement benefits if possible. Waiting until age 70 to claim will mean you receive the largest possible monthly benefit payment.
“Foot-dragging” is a great tactic for extending the life of your retirement savings. Waiting to retire helps delay the moment when you’ll need to crack open your nest egg, thereby giving investments longer to grow and giving you longer to contribute to them.
Wipe Out Debts
All debt — high-interest credit-card debt in particular — forces you to spend money on interest that you could be putting toward retirement. Set a goal to pay off your debts before retiring.