Ladenburg Thalmann Asset Management CEO Phil Blancato shares his advice on how to save for the golden years.
Millions of retirees depend on Social Security benefits to pay their bills. In fact, about one in five couples depends on their monthly checks for at least 90% of their retirement income, according to the Social Security Administration.
However, Social Security benefits were never intended to be a primary source of income. They were only designed to replenish about 40% of their pre-retirement income, and the rest would need to come from their savings, a pension or some other source of income.
If you are approaching retirement age and are realizing that you need to supplement your Social Security benefits, you have a few options.
3 AMAZING TRAPS OF WORK DURING RETIREMENT
1. Increase your retirement contributions
It is never too late to save more for retirement. Even if you are approaching the last year of your life, you can save more than you think.
If you have access to a 401 (k) plan that offers employer-matched contributions, try to save at least enough to earn full equivalence. Depending on your salary and how much your employer will match, you can potentially receive thousands of dollars a year in matching contributions. If you are not taking advantage of this advantage, you are leaving free money on the table.
In addition, if you are 50 or older, you are eligible to make 401 (k) and IRA update contributions. Typically, you are allowed to contribute up to $ 19,500 a year for your 401 (k) and $ 6,000 a year for your IRA. After turning 50, however, you can save an additional $ 6,500 per year on your 401 (k) and an extra $ 1,000 per year on your IRA.
Saving more for retirement can be difficult. But even if you can’t save a lot, every little account counts.
DISCOVER FOX BUSINESS ON THE MOVE BY CLICKING HERE
2. Consider working harder
Just over half (52%) of Americans say they expect to continue working after age 65 or never to retire, according to a survey by the Transamerica Center for Retirement Studies. If your savings are insufficient, it may be a good idea to postpone retirement or get a part-time job after you retire.
Even if you can only postpone retirement for a year or two, it can make a significant difference to your savings. When you work harder, you spend less time on retirement – and less time to save. You will also have more time to prepare for retirement, making it a little easier to increase your savings.
If you prefer not to postpone retirement, you can consider getting a part-time job. This can not only help you save more, but it can also give you the opportunity to explore a new sector. If you’ve always been interested in a particular field, but you didn’t want to make it a career, retirement is your chance to try something new.
CLICK HERE TO READ MORE ABOUT FOX BUSINESS
3. Delay in claiming benefits
While Social Security benefits alone are probably not enough to survive retirement, you can earn bigger checks by waiting a little longer to start complaining.
To receive the full benefit amount that you are entitled to, you will need to claim full retirement age (FRA) – which is 66 or 67 years old, depending on the year you were born. If you wait until after your FRA to claim benefits, you will receive up to 32% more each month.
The more you delay benefits (up to 70 years), the more you will receive each month. If you’re having trouble saving, these bigger checks can be very useful in retirement.
Social security benefits can have a significant effect on your retirement, but you will probably need other sources of income to retire as comfortably as possible. Taking steps to build a stronger nest egg, it will be easier to make the most of your old age.