Along with estate planning naturally comes thoughts about your golden years. Where will you live? How will you take care of yourself? Will you have enough money to live on for the rest of your life?
Worries about running out of money as you get older is a common fear. And for good reason. Some studies show that many over the age of 55 have only $10,000, if that, in retirement savings. That’s woefully short.
Although we all know people who have lived comfortably, but frugally, on almost social security alone, you can’t count on that anymore. And why would you want to? There is a lot of living to do after retirement, and you need to have the money to enjoy it!
So what should you do if you are in the situation of being over 50 and not having saved enough? You might want to talk to a financial planner to devise a financial and investing strategy to get you on track.
But in the meantime, here are some basics to consider:
- pay down credit card debt as fast as you can
- cut your expenses to the bone
- make retirement savings your number one priority
- take advantage of any discounts you can, AARP, etc.
- make the maximum contributions to 401Ks, and IRAs.
- play catch-up by putting an extra $5,500 into your $401K or extra $1,000 into your IRA per year, as allowed by law
- don’t start collecting Social Security at age 62—try to wait until 70, or at least 65, to receive better monthly lifetime benefits
- realize you may have to work more years than you planned, at least part time.
Mr. Kraft assists clients primarily in the areas of estate planning and administration, Medicaid planning, federal and state taxation, real estate and corporate law, bringing the added perspective of an accounting background to his work.