We often think of retirement as something that will come far in the future. When you’re young, retirement is often the last thing on your mind. Once you get a bit older, you’re so busy trying to pay the bills that you don’t have enough for savings (or so you tell yourself). The next thing you know, you’re in your 50’s and 60’s and retirement is knocking on your door. Sure you may have a retirement account through your employer, and you may even have a few bucks in a savings account, but ask yourself…are you really ready to retire? Here are ten signs you need to start boosting your retirement savings
- You Have No Idea How Much You’ll Need to Retire
By the time you reach the age of 50, you should have some idea of how much money you’re going to need to have saved in order to live comfortably on retirement. If you don’t have the slightest idea of how much you’ll need, you’re not ready to take that leap just yet.
Solution: Though you’ll need to save a lot more money, there’s still time to determine how much you’ll need to live. There are plenty of online tools that you can utilize to determine how much you need to live on once you retire. If you’re still having complications you could always talk with a financial advisor who can give you factors to consider.
- You’ve Depleted Your Retirement Funds
Life happens to us all. When you’re looking to survive for today, sometimes the simplest solution can be to take a bit of money from your savings for the future. After all, you have years to replace it. The only problem is, you never replaced it and now you’re a few hundred (or thousand) dollars short of your retirement savings goals. If this is your case, you’re not yet ready to retire.
Solution: You could consider investing as a means to earn some extra money to replenish your retirement account. If you’re in the 40-50 year age range, then you have at least another 15-25 years to invest and save towards your future. Reputable investment resources can give you advice on which stocks pose the least risks so that you can get a better return on your investment in the long run. Other options for boosting your retirement savings might be to save larger amounts over the next few years, or even find ways to earn additional income to make up for the difference.
- You Have Debt Coming Out Your Ears
Still have a long way to go on your mortgage payments? Maybe you’ve taken out a student loan for your child and still have to pay on it? Or maybe you just have a lot of old debt that you never took the time to resolve. Whatever the case is, if your debt to income ratio is high, you’re not ready to retire just yet.
Solution: You will need to first reevaluate your current budget and eliminate any unnecessary spending. From there, you can begin using the extra money to pay off your debts. If you have too much debt to handle, you are going to want to talk with a financial organization such as a debt consolidation company or a credit counseling agency that can assist you in coming up with a feasible plan to repay your debts.
- You Barely Make Ends Meet Now
If you’re in a category considered to be living paycheck to paycheck, this could pose a problem once you retire. Since retirement income is a fixed amount of money each month, if your expenses are out of hand now, you might find yourself struggling financially once you retire.
Solution: If you’re nearing retirement soon, you may want to consider downsizing a bit so that you can afford the cost of living. Moving to a smaller home would save you a considerable amount of money on everything from the mortgage payments to the utility bills. If you’re almost done paying for your house, then you might consider renting your property. This way you don’t lose your asset, your mortgage gets paid off, and you have a little extra money in your pocket.
- You’re Not Sure You Can Cover Healthcare Coverage
Though you may qualify for Medicare once you’re ready to retire, there are still a lot of out of pocket expenses you’ll have to factor into your retirement budget. As such, if you find that you’re not going to be able to afford the out of pocket expenses (co-pays, prescription costs, etc.), you are probably not ready to retire.
Solution: There are a few things you can do here. You can look back over your budget and crunch some more numbers so you can save for healthcare costs. You can also take on a part time job now so you can put away more money for your future. Lastly, you can look into affordable healthcare options that other retirees take advantage of so you can save money.
- You Want to Retire and Live a Life of Luxury
Do you dream of vacationing on the regular basis, buying expensive cars or boats? If you have this idea of retiring in style, then you’re not ready to retire.
Solution: If you’re in good health you might consider taking on a part time job now to put away money to save for your lavish retirement spending. You could also start a side business in which you’d work entirely online so that you can work while still enjoying the pleasures you’re interested in once you retire.
Planning for retirement is something that should really be considered the moment you start earning a living for yourself. However, it can be rather easy to put something that is years and years away on the back burner. If any of the above mentioned scenarios is your case, you need to start actively working on it now. It may take a little more elbow grease and effort on your end, but at the end of the day, when you’re ready to give your 2 weeks’ notice, you’ll have peace of mind in knowing that you are financially content.