If you’re fast approaching the retirement stage of your life with minimal savings, you may have cause for worry. But taking the necessary precautions now with the following 7 retirement techniques can help increase your nest egg and without a lot of sacrifice.
Work Your 401(k)
Benefits such as an employer matching retirement program equate to a valuable perk when looking for a job. If your employer offers a 401(k) program through work, you need to fund it to the highest level you can afford.
After paying your mortgage, utilities and other household expenses, place the remainder of your funds into this account. If you’re 40 years-of-age and put away close to $17,000 each year, you could accumulate over $1 million by the time you reach 65.
Know Your Healthcare Options
Healthcare coverage is integral at any age as it covers important health services such as doctor, emergency and hospital visits. With the right plan, you also won’t have to use your retirement savings to pay for medical expenses incurred as you age.
During your employment, your employer may pay the majority of the premium and leave the responsibility of the deductible to the employee. If you’re 65 and older or you receive social security disability insurance or end-stage renal disease, you’re eligible for Medicare.
Re-Tool Your Budget
Savings can add up quickly if you re-tool your household budget. Take a look at your spending for the previous month to determine the areas where you can tweak. If you normally enjoy a latte at your local cafe, skip the coffee run and make your own blend at home.
Dining out can be another major household expense. Instead of going out to eat regularly, whittle it down to once each month or on special occasions.
Bank Additional Money
The rewards of working hard at your job are usually shown through a holiday bonus and raise. While you may want to spend the additional income on frivolous things such as a T.V., bank the additional money instead. You’ve never had this amount of money before, so you won’t miss it.
The same advice can used if you get a tax refund from Uncle Sam. As long as you can live comfortably and pay your loans and bills on time, putting the money away for your future will help boost your retirement nest egg.
Eliminate Debt
Debt placed on credit cards quickly can add up. If you can’t afford the items that you’re placing on your charge cards, don’t make any new purchases. If you’re looking to pay down debt, begin by paying off cards with the highest interest rates.
You may also be able to take advantage of transfer balance cards with zero interest. The sooner that you stop overspending and pay down the amounts on your credit cards, the sooner you’ll have more money to save for your retirement.
If you feel like your debt is at the point where you will never be able to catch up, you can look at benefits of Chapter 7 bankruptcy. Although this type of bankruptcy discharges most debt, typically, there are income limitations.
It’s imperative you look at all your options before you lean towards a bankruptcy. Some people even look into getting a 0% APR credit card to give them more time to pay off their credit card debts.
Downsize
As parents age, their lives change. While you were once consumed with raising your family, you may now see yourself as empty nesters. As your children leave the home to go off to college or get married, you don’t need as big a dwelling as before.
This is the ideal time to downsize your living arrangements. From a condo and townhome to a smaller house, the possibilities are endless. If your home is paid off, use the funds to pay for your new dwelling. Additional money left from the sale will all go toward your retirement account.
Convert Assets
Assets such as jewelry, antiques and other collectible items may be worth a lot of money. This type of collection could be converted into a proper retirement investment.
Make a list of the items that you have such as a boat you no longer use, vacation home that’s too far or expensive hobby that’s collecting dust. Do your homework to determine fair market value for the items. Once sold, you can boost your retirement savings significantly.
Whether you were a procrastinator or you had other outlets for your money such as putting your kids through college, your retirement account may have taken a hit. The good news is that with the above techniques, it’s never too late to play catch up.
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