Seniors in America are delaying retirement, and it’s not necessarily because they want to. Almost 20% of those over age 65 are working, the highest percentage since the 1960s, according to USA Today. The reason? They don’t have enough money to retire.
Read more: Over 40 with no retirement savings? Take these 6 steps
Americans aren’t saving enough for retirement
It’s becoming a well-known fact that Americans in general are behind on their retirement savings. Many people say they’ll save more for retirement in the future or that it’s too early to begin saving. But the trouble with that thinking is that time goes by more quickly than we realize!
In fact, according to Investopedia, the average sixty-something has an estimated median of $172,000 in the bank, but what they really need is about six times their salary or more. If you make $50,000, that’s $300,000 saved.
To make up for the shortfall, seniors plan to work longer. A 2015 Aegon Retirement Readiness Survey found that a majority of seniors (53%) plan to work part time or more during retirement, while only 14% of Americans over 55 plan to retire before the age of 65.
But as older Americans have discovered, retirement can creep up on you fast, and the 2008/2009 recession didn’t help any with people’s retirement savings. So, in an effort to save as much money as they can, more older Americans are staying in the workforce and delaying retirement, planning to work past the age of 65. But too often, people are finding that may not go as planned.
According to a study by the Employee Benefit Research Institute, at least 46% of retirees stopped working sooner than they planned, and 55% retired due to a health problem or disability. A Fidelity survey found that workplace stress was a big factor also.
So what does all this mean for you?
Read more: How to painlessly save $1 million for retirement by implementing one strategy​
Ways to prepare for retirement
If you’re over 50 and worried about having enough for retirement, every little step in a positive direction can make a big difference.
Here are some things to keep in mind:
- Keep spending to a minimum. Employ cost-cutting strategies now. Learn to stretch every dollar by cutting expenses, downsizing, and making the most of every penny. As Clark says, ‘It’s not what you make that counts, it’s about what you keep!’
- Add as much as possible to your retirement savings. Even if you can only add a little more than what you are saving now, every little bit helps! The average American contributes about 8% to their retirement, which isn’t enough — but adding 3% or more can mean a lot of money over time. In addition, if you’re eligible, you can get free money for retirement.
- Make sacrifices now to be more comfortable later. If you have debt, now’s the time to get rid of it! Sell things you don’t need, give up little luxuries — any sacrifices you can make now will benefit you down the road.
- Know all your options. Knowing the options available to you and how to best utilize the money you do have will help you greatly when it comes to planning for retirement and gaining peace of mind. Check out Clark’s Investment Guide and Investing FAQs to learn more. And if you haven’t already, talking to a fee-only financial planner may help.
- Keep an open mind. Even if you don’t have the money you hoped you would have saved for retirement, stay positive and keep an open mind. There are many people who have come up with creative solutions to spend less in retirement that they enjoyed even more, such as retiring abroad.
Once you take a good look at everything and make some small changes, you may find you could retire sooner than you thought.
Read more: 9 retirement-friendly freebies that can save you big bucks
