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Saving for retirement can get simpler as you get older!

Retirement savingsI don’t know what your retirement savings are or how much you plan to save a year, but I do know that whatever you plan to save will probably not be what you actually end up saving. Bu you don’t have to be retiring broke.

There is hope – even if you’ve just decided to start saving for retirement at 60. The good news is that there is currently a great retirement savings plan that most people don’t know about, and its offered by the U.S. government. Social Security !

Let me give you an example. The Social Security website tells me that at the age of 66 I will get an estimated income of  about $2,000 a month. The same site goes on to mention that my income will increase 8% a year for every year that I delay retiring.  So, if I wait another two years my income will increase to $2,332 dollars a month. That’s an increase of $332 a month or $3,984 dollars a year. If I’m saving up money for retirement, well …. that’s a lot of money.

Wow, almost four thousand dollars a year more . . .for life!   Think about how much money you would have to have socked away to give you $4,000 a year – Just for working two extra years.

If you are 66 and plan on living, maybe another twenty years, you would be getting an additional $80,000 dollars. or to state it another way, you would have an additional “savings” of $80,000 to spend in retirement. Let me ask you a question. Are you currently saving $40,000 a year for retirement? (I’m guessing the answer is no)

Pretty sweet right? All you have to do is work an additional two years.  But, for many of us that’s not easy.   Many people get to 66 and they are just worn out. Their health is not what it once was and they can’t continue in the job they have. The good news is that Social Security says you don’t have to continue working or, at least, working at the same job. All you have to do is delay filing for benefits two years.  Let me give you an example. Me!

Retiring Broke ? 

It’s not too late    

If for some reason, I can’t continue to do my job, I have an alternate plan.   If I quit my job and take an easier job for, let’s say $20,000 less a year. I am going to have to change my lifestyle or come up with $20,000 a year from somewhere.  Let’s assume that I have $40,000 in retirement savings. If I take the $40,000 from savings and pay myself $20,000 a year to make up for the smaller paycheck I am getting, I will be able to go another two years without filing for Social Security benefits.   After two years and $40,000 of spent savings, I will receive almost $4,000 a year additional benefits. 

So, the effect is that I will be getting a 10% return on my $40,000 for life.  ($4,000 /$40,000) So, by continuing to work two years, I am, in effect, saving $80,000 for retirement. It’s never too late to save something.

Health in Retirement

random retirement

Never too early to start saving

Now the part of this that makes it all work is your health.

If you are in declining health it might not be feasible to continue. But, if you can spend a little money on yourself to increase your health the retirement payback is enormous. Perhaps you join a gym or hire a personal trainer to badger you into eating better and losing weight. You could see a “senior” health specialist for a consultation. If you were to spend  a thousand bucks on a good health coach or a diet specialist and  delay your retirement  a year or more, it could pay you back 30 or more times your original investment!

Think about it . . .

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