primer domain was triggered too early. This is usually an indicator for some code in the plugin or theme running too early. Translations should be loaded at the init action or later. Please see Debugging in WordPress for more information. (This message was added in version 6.7.0.) in /home/ikq167bdy5z8/public_html/propertyresourceholdingsgroup.com/wp-includes/functions.php on line 6114The 71.6 million men and women born after World War II and called “baby boomers” started turning 65 eight years ago.
The 71.6 million men and women born after World War II, called “baby boomers,” started turning 65 eight years ago. But it will be another ten years before everyone in that generation is old enough to retire.
So, what does retirement look like for the generation that lived through Woodstock, Watergate, iPhones, Instagram, and everything in between?
A new study from the Transamerica Center for Retirement Studies says that the average amount of money boomers have saved for retirement is $202. That may sound like a lot of money, but it only brings in $8,080 a year, or $673 a month.
A lot of the time, income tax also takes a bite out of that money. With that in mind, here are three tried-and-true ways that baby boomers might want to think about using to build up their savings for retirement.
Don’t pass it up.
Forbes says that two out of three Americans are using their savings to deal with inflation that is killing them. But here’s one of the easiest ways to get the cash (and peace of mind) you need right now.
You could own stores like Walmart, Whole Foods, and Kroger (and collect fat grocery store-anchored income on a quarterly basis).
What does Ashton Kutcher have in common with an economist who won the Nobel Prize? An app for investing that lets you turn small amounts of money into a diversified portfolio.
Work more and wait The Social Security system
Working longer not only delays taking money out of your retirement investments, which lets them keep growing, but it also pushes back the age at which you have to start getting Social Security payments.
Take that set of investments worth $202,000. If that money was put into a conservative portfolio that earned 5% a year—the average return on stocks over time is 11.9%—it would grow to $233,840 in three years. Using the 4% rule for withdrawals, that would be $9,354 per year, which is an increase of $1,274 per year.
As for Social Security, if you wait to retire until after you reach your full retirement age, your monthly benefit will go up by 8% each year until you reach age 70, when it will be the highest it can be.
A Baby Boomer born in 1955 would reach full retirement age at 66 years and 2 months in 2022. By spring of that year, he or she would be getting an average Social Security benefit of $1,668 per month. If you waited three years to get your benefits, the amount would go up by 124%, to $2,068. That’s an extra $400 per month.
When you add in the extra money you get from letting your investments grow, waiting three years before retiring gives you an extra $506 per month, or $6,074 per year.
Find a chance to “returnship”
You can also add to your savings by working part-time after you retire. In fact, more and more companies are encouraging older workers to go part-time instead of completely retiring. Many companies also offer “returnships” for older workers who want to switch to a different field or type of job.
The part-time job doesn’t have to pay very well either. At the federal minimum wage of $7.25 an hour, you would make about $5,100 a year if you worked 15 hours a week.
Sure, that doesn’t seem like much, but if you use the 4% rule, that $5,100 in income is the same as adding about $128,000 to your investment portfolio.
Cut your expenses.
Finding ways to spend less in retirement gives you a lot of bang for your buck because you’re saving money that you would have paid taxes on. Try to find ways to save money on monthly expenses that you have to pay every month. That way, you’ll see your savings every month.
You can also save money by paying off your mortgage or other debts before you retire; downsizing your home; travelling out of season; taking advantage of discounts for seniors; shopping around for insurance; or going from two cars to one car in your household.
Max out your retirement accounts.
Individual Retirement Accounts (IRAs) let people older than 50 put an extra $1,000 into a regular IRA or a Roth IRA each year. This is on top of the general $6,000 limit per year.
To put money into an IRA, you need to earn at least as much as you put in, and the annual limit applies to all of your IRAs.
If you still have access to a pre-tax retirement account at work, like a 401(k), 403(b), or 457 Plan, you can put up to $20,500 into it each year, unless your plan has a lower limit. In many cases, your employer will match a certain amount of what you put in, which is about as close as you can get to getting money for nothing.
