3 steps to a better retirement
CNN Money, November 3rd, 2009
Question: My husband and I are in our late '50s and haven't
put anything away for retirement, although we do own our home. We
figure we'll work another 10 years or so before retiring. Do you have
any helpful suggestions for us so we won't have to live solely on
Social Security?
--Peggy, Rockvale, ColoradoAnswer:
Sure, I've got a few recommendations. But since there are no secret
formulas or magical fixes for making up for a lifetime of saving little
or nothing (aside from what you have in home equity), I doubt that most
of them will come as blinding revelations to you.
What you may
find surprising, though, is how much you can still improve your
retirement prospects if you really commit, even though you're getting a
relatively late start.
1. Save, save, save
The first
thing you've got to do is start socking away as much as you possibly
can. Ideally, you'll do this saving in 401(k)s, IRAs or other
tax-advantaged retirement accounts, although barring that, plain-old
taxable accounts will do.
Granted, starting from scratch in your
late 50s isn't an ideal position to be in. But it's not hopeless
either; you still have time to accumulate enough of a retirement stake
to make a difference in your eventual standard of living.
You say
that you expect to work about 10 more years. Even if you can manage to
save just $250 a month over that period, you would have a nest egg
worth roughly $43,000, assuming a 7% annual return. If you can boost
the amount you put away to $500 a month, you'll end up with twice that
amount, or $86,000, and if you manage $1,000 a month, you'll have
$172,000.
Read more of this article.About Reverse Mortgages: Learn all about reverse mortgages at NewRetirement.com
Professional Financial Advisors: Find out what a financial advisor can do for you at NewRetirement.com.