As a general rule, we’re all supposed to be putting 10 to 15 percent of our income towards saving for retirement each year (and we’re supposed to have started this back in our 20s). Unfortunately, the reality is that things don’t always go as planned. Whether it’s due to health, career, family, market events or a combination, there are any number of reasons why you might have had to skip a year, a decade or more of saving. Perhaps that’s why 1 in 5 of people in their 70s has less than $50K saved according to a 2020 TD Ameritrade report. If you’re in this position and you or your loved one could now benefit from senior living, this doesn’t mean you’re out of options. Here are some quick ways to save.
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Saving for Retirement in Senior Living
The next step is to close the gap between your current resources and what you expect to spend on senior living in retirement with some quick saving tips.
- Make Extra Contributions – At age 50 you can begin to make extra contributions to your IRA and 401(k) accounts. That extra amount is now $6,500 for 401(k)s and $1,000 for IRAs according to the IRS.
- Start a Health Savings Account – These accounts can help you prepare for unexpected medical expenses and reduce your taxable income at the same time. What you save grows tax-free, and at age 65 you can start making withdrawals for qualified medical expenses.
- Hold Off on Social Security – Although you can start collecting benefits at age 62, most financial advisors recommend waiting until you are 70 instead because it increases your monthly benefit exponentially.
- Keep Working – We’re not talking another full-time career rather more of a side hustle, so to speak, that fits with your skillset like freelance or consulting work. Not only will it help you earn extra income, working helps you to stay active and provides a sense of purpose.
- Decrease Your Spending – Although painful to review your expenses, you may be overspending in areas you didn’t even realize! Look at automatically renewing subscriptions you no longer need, switch to a pay-as-you-go cell phone or even cut the cable cord and start using streaming services.
Most importantly, remember we’re here to help! Contact us today with questions, for more information or to schedule a virtual tour.