Unless you're Rip Van Winkle and stayed in the past 20 years, you know about the lack of retirement savings of Americans and their consequent lack of confidence in their ability to retire. So if you are one of the millions of boomers approaching retirement age with little or no retirement savings, if only wring their hands in despair and give up?
No way! You only need to be resourceful and make the best use of assets you have. Let me offer an example of how to be creative to have a good retirement.
Suppose you are part of a marriage, both 60 years old, you're earning about $ 75,000 per year, and has gained a similar amount over his career, adjusted for average wage growth. Also assume that your spouse has income is sporadic and relies on the spouse's benefit based on Social Security earnings record.
In this case, the Social Security income at age 66, which is your Full Retirement Age (FRA) will be about $ 2,000 per month. Your spouse would receive an additional $ 1,000 per month in FRA's for a combined income of $ 3.000 per month, or $ 36,000 per year. Now consider a measure that may seem radical, but also very practical: consider linking with other like-minded couples in a similar situation, finding a nice house with three bedrooms, and living together. Their combined income is $ 72,000 per year.
Beating the averages
This income amount is $ 72,000 higher than the national average annual income of $ 62,857 for household units in 2009, as reported by the U.S. Department of Labor, or the average household income for all units American family $ 50,221, as reported in 2009 by the U.S. Census Mesa. It is also higher than the average annual expenditure of $ 49,067 as reported by the U.S. Department of Labor in 2009 for all units of U.S. households.
So if an average American family can live on less than $ 72,000 per year, I'm betting that two couples of resources can do the same. And remember that this Social Security income will increase by inflation, and that retirees pay less income tax of income from Social Security taxes paid on wages for U.S. workers.
And there are a number of ways you can improve your situation. First, if you delay taking your Social Security income until age 70, your monthly income would increase to $ 2,640 per month. There is no reason for your spouse to delay taking benefits beyond age 66, since there is no delayed retirement credit for that spouse's income increases. In this case, you want to file and suspend your Social Security income at age 66, so that your partner may start at $ 1,000 monthly income spousal benefit at age 66. Upon reaching age 70 and start taking Social Security benefits, your combined income is $ 3. 640 per month or $ 43,680 per year. If both spouses did this, their combined income would be $ 87,360 per year.
Can be further improved if the two couples start saving like mad now, and each save $ 2,000 per month. If they do for 10 years, have accumulated a little over $ 150,000 (assuming 5 percent annual gain on your savings). If you decide to start drawing on the savings for additional income, could generate $ 6,000 per year if they retire to only 4 percent of their savings, and $ 7,500 per year if they withdraw 5 percent.
Do not spend it all in one place
However, I would suggest that the savings remain invested for the inevitable day when one or more of them die and thus lose their Social Security income. In the example above, while the employee or the spouse dies, then the spouse's benefit of $ 1. 000 per month stops, and the employee's earnings continues for the remaining life of the surviving spouse. This amount was $ 2,000 per month if the employee started benefits at age 66 and $ 2,640 per month if the benefit began after 70 years.
I also suggest that this pair of couples who do everything possible to spend less on your combined income from Social Security and save as much as possible, it is inevitable that one or more of them will have some type of long-term care. They may be able to take care of the first person needing care, but ultimately will not be able to do this yourself and you will pay for additional help of some kind.
I also recommend making a pact to be as healthy as possible, to reduce the money spent on medical bills and long term. They can all encourage each other to daily exercise such as walking together after dinner. They can share the responsibilities food, preparing healthy food can all share. Can come together to grow their own food in a garden. Could share resources, such as appliances, cars, furniture, etcSe could start your retirement with a giant garage sale to get rid of furniture and equipment, need - to reap even more savings. In summary, we have formed a community!
Finally, if one or both of the couple who own homes that can be rented, they must do in order to generate additional income. And home equity could be used as long as one or more of these retirees to the needs of long-term care.
I realize that there are many challenges to be addressed with such a provision, such as support, discretionary spending, exchange savings, property issues, and decide that children visit or stay grandsons. And there will be major problems when a person needs long-term care or dies, but will have to plan carefully for this eventuality. But meanwhile, they have had many good years of retirement.
This is just one example of how you can be resourceful to make retirement work. I realize that their situation could not fit the above example, but I hope this inspires you to be creative to make the most of your retirement years.
No comments:
Post a Comment