Just six in 10 American workers report having saved anything — anything — for retirement, according to the Employee Benefit Research Institute, so a lot of people today may be losing sleep over their future finances.
Even those who are making a diligent effort to prepare for their golden years are falling short: Data from workplace plan administrator and fund giant Vanguard shows that just 18 percent of workers save the 10 percent or more of income that experts recommend squirreling away for retirement.
Here are ways later-in-life savers can address anemic retirement portfolios before it’s too late.
•Move the goal post: Pushing back the due date for retirement may not be your ideal tactic, but it is one of the most effective. (The alternative is sticking to your original “retire by” date and then — let’s state this as delicately as possible — running out of money before your expiration date.)
Every extra year you work and save is also one more year you won’t be drawing down your portfolio.
•Go part-time: Retirement needn’t be an all-or-nothing proposition. Easing your way out of the workforce by reducing your hours at your existing job may provide just enough of that much-needed leisure time without completely cutting off the paychecks.
Part-timers may also be able to retain some workplace benefits, like health coverage.
•Play catch-up in your 401(k): The IRS provides some tailwind to encourage workers 50 or older by allowing them to make “catch-up contributions” in employer-sponsored retirement plans (like 401(k)s and 403(b)s). The whippersnappers in the next cubicle are limited to $18,500 in annual contributions. But once you hit the big 5-0, you’re allowed to sock away an additional $6,000 a year for a total of $24,500.
•Downsize the homestead: Many retirement planning experts recommend going into your golden years with no mortgage debt. That can be a tall order considering a mortgage is the largest debt most people have.
Instead of trying to pay off a big loan, consider downsizing the IOU by moving into a smaller, cheaper place while interest rates are still historically low. (It may simply be a matter of moving to a different neighborhood.)
•Welcome in a roommate: Taking in boarders will help cover today’s costs of living — mortgage and monthly utilities — to free up more money for you to invest for retirement.Having a roommate doesn’t have to be a year-round commitment, either. If you live in an area that attracts tourists or seasonal travelers, you can rent by the day or week via Airbnb or VRBO.•Wait to cash in your Social Security chips: When you postpone taking benefits beyond your full retirement age — which varies based on your year of birth — the Social Security Administration increases the amount you get as much as 8 percent annually until your 70th birthday, when the benefit stops increasing.At SSA.gov there’s a simple benefits calculator to help estimate your future earnings.
You can love your kids with all your heart, but that doesn’t mean you can afford to shower them with the contents of your wallet, too. For those with inadequate retirement savings, every act of generosity matters, especially if supporting adult kids means sacrificing your own financial stability when you may not be able to work. It may be a hard conversation to have with the kids, but explain that weaning them from the parental ATM is necessary so that you don’t become a financial drain on them later.
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The article 13 Last-Ditch Ways to Avoid the Poorhouse in Retirement originally appeared on NerdWallet.