Planning for Retirement at Any Age

The best time to start saving for retirement is now. If you're young and in the early stages of your career, financial advisors usually recommend setting a retirement savings goal as soon as possible and sticking to it.

If you're midway through your career, or nearing the end of it, you still have time to save. However, you may need to save more aggressively or delay your retirement. Let's break down your options together.

Set Your Retirement Goals*

What does retirement look like for you? Each person will have a different idea of what retirement means, so it's important to set goals that align with your post-career plans.

If you think you'll get a part-time job or pursue a hobby that could bring in a small income, you won't have to save as much during your working years. In most cases, it's safer to assume you will be living off of the money you're saving now.

Here are a few questions you should ask yourself when setting your retirement goals.

What age do I want to retire?

The average retirement age in the U.S. is 62-years-old, likely because this is the earliest age you can receive Social Security benefits. Nonetheless, some workers find they have enough to retire by age 57, or sooner if they sell a business or inherit money.

Delaying retirement, even by a few years, can make an exponential difference in your savings. If you're married, you will also need to take into account when your spouse is likely to retire.

How long do I expect to live after retirement?

Although this isn't the most pleasant conversation to have, it's crucial to your savings goal that you plan out enough money for the length of your life. Do you, or your partner, have health issues? Will you eventually need long-term care?

The type of care (in-home or assisted living), state, and possible medical needs could potentially drain your savings. It's impossible to predict every potential need that could occur after you retire, but it's best to over-prepare than live in debt.

How much monthly income will I need to maintain my current lifestyle?

According to Investopedia, the average monthly (Social Security) benefits for a retired worker in 2018 was $1,413 per month. For some, this may be enough to live on. However, for others, you'll need to invest time and research into the amount you will need each month after you retire.

How much do you spend on groceries? Bills? Other living expenses? Vacations? If you're already savvy with your finances, a savings calculator will be a great additional resource. If you're not really sure where to begin, a financial advisor could be the best route for you to take while you still have time.

Keep Track of Your Finances

Half of the struggle to meet your savings goal is staying consistent in the amount you put away each month. It's recommended that by age 30, you should have at least half of your annual salary saved. In other 10 years, you should have twice your annual salary. As this trend continues and your investments grow, you should have at least six times your current salary in retirement savings when you turn 60-years-old.

Are you on track right now? Recent studies show that only 26% of workers with a retirement plan feel very confident about the amount of money they (and their spouse) have saved for retirement.

If you're confident in meeting your goals, that's great! If you aren't, what are your next steps to becoming financially stable in your late years? Consider:

• Contribute to a 401(k), if eligible. These accounts allow you to contribute pre-tax money, which will allow you to invest more.
• Open an IRA account. Choose from a Traditional or Roth, depending on your current and future financial goals.
• Automate your savings.
• Reign in your spending and set strict limits.
• Take advantage of the equity in your home. If you're on a fixed income or looking to make a significant addition to your finances, a reverse mortgage refinance** might be for you.

Do you have questions about what homeownership will look like for you during retirement? Contact a Mortgage Advisor today.

*Contact a professional financial advisor for more information

**At the conclusion of a reverse mortgage, the borrower must repay the loan and may have to sell the home or repay the loan from other proceeds; Charges will be assessed with the loan, including an origination fee, closing costs, mortgage insurance premiums and servicing fees; The loan balance grows over time and interest is charged on the outstanding balance; The borrower remains responsible for property taxes, hazard insurance, and home maintenance, and failure to pay these amounts may result in the loss of the home; Interest on a reverse mortgage is not tax- deductible until the borrower makes partial or full re-payment.