It is now estimated that you will need 85% of your working income to maintain the standard of living prior to retirement. Facing these shortfalls many people are postponing Retirement and have now started to increase the amount of savings going into their 401(k) accounts. Some aspects that Baby Boomers are looking at during this postponement are: Moving to cheaper housing, Keeping grocery bills to a minimum Reducing travel and Taking bigger risks with their investments There are several issues and actions you will want to investigate when looking to retire, that can make the process a little more pleasant and something to look forward to, not having to worry whether you will run out of money or have to reduce your standard of living. Here are some items for consideration.
Debt Reduction: Sometimes this isn’t considered in retirement income planning, but reducing your debt will help increase your income. If you are unable to pay off some of your debt at least try and pay it down.
Social Security: Even though this source of income is for a lifetime, the longer you can postpone collecting this, the more advantageous it is in the long run. Not taking your Social Security at age 62 and waiting until 65 can increase your income by approximately 40 percent.
Taxes: Avoid taxes as much as possible, they can take a large bite out of you investment returns. Learn the tax treatment of all your investments, so you can allocate them into investments that will minimize the tax bite. Don’t unknowingly give more to Uncle Sam than he deserves.
Develop a Plan You will need to understand your expenses and which ones are essential. Factor in effects of inflation because your expenses in 25 years will double if inflation reaches 3%. Don’t forget to consider the risks to your retirement, such as the stock market, longevity, and asset allocations of your portfolio, and prepare for unknown costs of supplemental health care. The fact that you will postpone your retirement and work a little longer creates a great opportunity to start creating a residual income stream that will help offset some of the losses you may have experienced in the past few years due to the economic down turn.
Do A Test Drive: If downsizing to a small home is in the plan and living in a less expensive area of the country, try renting a home in the area you choose to live. This can give you an idea of your surroundings and the new friends you will make giving you knowledge of what to expect for the future.
Consider ways to make a residual income after retirement. One good way to create an income stream is through online marketing. There are many new programs now on the internet that will guide you through the learning process to become successful and reduces the time it takes to start making the income to put toward your nest egg. These programs will help you find a niche and get you started efficiently, and learn the techniques for marketing both online and off. Make sure the program you become involved in has a good training platform, as well as coaching and mentoring. So many times people get involved with products that are only there to scam you and leave you with empty pockets. Be very vigilent and do as much research as possible. There are thousands to be made with some simple techniques through internet marketing, and it can be a very satisfying way to generate extra income.