If you are 50 years of age or older, and you still haven’t put away a substantial enough amount of money for retirement (or possibly nothing at all) you may think that it’s too late for you to start saving and that you’ll have to “work forever” in order to survive.
While it certainly is going to be a bit tougher, there are a number of things you can do if you start right now that will allow you to have a significant bit of money set aside at age 65 so that you can stop working and enjoy a moderate lifestyle. Keep reading to find out more.
Make savings your first priority
Simply put, making savings your top priority is a definite must. If you have the financial means, and a 401(k) retirement plan, if you save $23,000 over the next 15 years (assuming that you’re 50 now) you would have approximately $570,000 when you turn 65 based on a 6% interest rate. If you don’t have a 401(k) then you definitely need to open an IRA ASAP.
Don’t forget the 25 Times Rule
This rule says that, based on what you need in supplemental income for one year today, you’ll need 25 times that amount of money by the time you retire in order to stay at your existing lifestyle. For example, if you use $40,000 in one year now, by the time you reach 65 you’ll need to have $1 million saved in order to be relatively secure in retirement. In order to reach these aggressive goals there are investing strategies like binary options that can help you along the way.
And don’t forget the 10% Rule either
This rule, more or less, states that if you start saving when you’re in your 20s you should save approximately 10% of what you earn for retirement. For every decade that you wait to start saving, you need to add another 10%. So, if you start in your 30s you should save 20%, in your 40s you should save 30% and, by the time you reach of 50s, 40% of what you’re earning should be put aside for retirement if you’re just getting started.
Put money into a healthcare savings plan as well
Yes, people are living longer these days but that also means, when it comes to healthcare, they’re spending more for health related problems. In order to make sure that you don’t decimate your retirement savings because of a healthcare crisis, starting a separate savings account for health, or making sure that you have plenty of health insurance, is vital.
Long-term healthcare insurance is probably one of the most important types of insurance that you can have once you reach your 50s or older. Medicare only covers about 60% of your healthcare costs by the way, and is deducted from your Social Security benefits, so having a supplemental health insurance account is extremely important.
Those four tips alone should help you to get started on your retirement savings right away if you’re 50 years old or older. The one most important piece of information to keep in mind is that, since you started late, you’re going to need to work extra hard and save as much as possible to “catch up”.
It can be done, and people are doing it, but don’t be fooled into thinking that it’s going to be easy. If you want to be able to enjoy at least a few of your “golden years”, the time to start saving is right now.