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Retirement: it’s supposed to be the golden years of your life, a time for relaxation and freedom.
But if you haven’t saved up money to support yourself during this period, retirement may feel more like a distant pipe dream than a tangible reality.
Don’t despair; even without any savings tucked away, there are ways you can take control of your finances and plan for life after work.
Here are 12 steps to take to help you build a nest egg and enjoy retirement.
#1. Save Something
The first thing you need to do is start saving money.
Even if you can only afford $10 a week, this is better than nothing.
Too many people tend to give up thinking it’s too late to save.
But this isn’t true.
First, we are living a lot longer, so if you retire at 65, many people have 20 or more years left to live.
This is time the money you do save can grow.
Second, you have to look at your situation like this. Would you rather not save and have nothing for retirement, or save and have some money?
Even if you only have $50,000 saved, this gives you more options in life than having nothing.
#2. Reduce Spending
Another important thing to do is reduce your spending.
You don’t have to live like a hermit, but consider ways to cut back.
Instead of eating out three times a week, cut it back to once every two weeks.
Consider buying store brands, shopping at discount stores or even thrift shops.
The more you can cut back, the more money you free up to save.
#3. Think Outside The Box
Once you cut back in some areas, it is time to think differently to find additional saving opportunities.
Can you share trash service with a neighbor? Maybe sell your expensive car for a reliable used car?
Could you find ways to get free food?
The more things you can do to save but don’t drastically change your quality of life, the better.
#4. Look Into Side Hustles
Bringing in additional income is something to consider as well.
The good news is with the gig economy, there are countless ideas for you to try.
You could grocery shop for others, deliver food, take part in focus groups, and more.
The key is finding something you enjoy and then figure out how to earn an income from it.
Once you do this, make sure you put all the money you earn into savings for the future.
#5. Don’t Take Risks With Your Savings
Many people are tempted to take risks with the little savings they have.
They figure it is worth it to try to triple their money overnight.
What they don’t realize is the odds are stacked against them.
They have a greater chance of losing everything than of winning.
Therefore, avoid taking these risks.
Remember what I said originally, having some money is better than nothing.
Invest your money in high quality, large cap stocks, along with bonds and take the return the market gives you.
#6. Consider Buying Annuities
Another thing to consider is buying an annuity.
If you go this route, you have to be careful, as they can carry high fees with them.
But there are some out there that offer great benefits, especially for people who are behind on saving.
By putting your money into an annuity, you get a guaranteed income stream during retirement.
Pair this with Social Security, and you might have enough to enjoy your golden years.
#7. Delay Social Security
This might sound odd, but you should do everything in your power to wait until you are 70 to take Social Security.
The reason is because you will get a larger monthly pay out.
Not only do you get 25% to 30% less each month by taking Social Security before your full retirement age, but for every year you wait until age 70 to take your benefit, you get an additional 8%.
Therefore if you can, wait until 70 to take the benefit.
#8. Take Care of Yourself
Medical costs will be your largest expense in retirement.
While you can’t reverse the aging process, you can be more active and eat healthy now.
The more you do this, the more you reduce your chances of needing costly medical care.
#9. Network
Networking might sound odd in an article about saving for retirement, but it’s not.
The more you network, the more opportunities come your way.
Maybe you hear of a higher paying job or you learn of a smart Medicare expert in your area that can help you reduce your insurance costs in retirement.
The more people you know and network with, the greater chance of this happening.
#10. Delay Retirement
Just as you should consider delay taking Social Security, so too should you consider delaying when you retire.
By working just a few extra years, you can put away a lot of money.
Plus, this gives the money you have saved more time to grow before you start taking it out.
#11. Work Part Time in Retirement
Another idea is to work part-time in retirement.
If you can find a job you enjoy doing, you can get the benefits of working and being social while earning an income.
And as was mentioned, the longer you can delay taking money from your retirement accounts, the better off you will be.
#12. Stay Positive
It can be disheartening to not have money saved fore retirement. But this doesn’t mean you can’t retire or not enjoy it.
The key is to stay positive.
Having some money is better than nothing.
Going on smaller vacations is better than sitting home all day long.
Plus, a positive outlook is good for your mental health, which can help lower some medical costs too.
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I have over 15 years experience in the financial services industry and 20 years investing in the stock market. I have both my undergrad and graduate degrees in Finance, and am FINRA Series 65 licensed and have a Certificate in Financial Planning.
Visit my About Me page to learn more about me and why I am your trusted personal finance expert.