No matter what age you are, it’s only natural to wonder if you’re going to have enough money to live on when you retire. If you’re in your 20s or 30s and have been taking advantage of company perks like matching 401(k) contributions from your employers, you might be a little less worried. If you’re over 50 and don’t have as large a nest egg as you were hoping for by this point, there are a few things you can still do to prepare.
The first thing to do is to continue to save. You can do so by making sure you are contributing the highest amount allowable to your company’s 401(k) fund. This is especially important if you are contributing less than the company’s highest matching amount, which is almost like throwing away free money. A few extra dollars per pay period could make a world of difference.
If you need to do some catching up, you can do so by making lump contributions to an Individual Retirement Account (IRA). Depending on the IRA you choose, you can lower your tax burden each year by contributing funds tax-free, thus lowering your earned income for the year in the process. In 2017, individuals 50 and over could contribute up to $6,500 to an eligible IRA. Check with a financial advisor or a tax professional for details.
Another strategy you’ll want to put into action is to tackle your debt. While paying off your mortgage and living in your residence was once an admirable and viable solution, it’s somewhat of an outdated notion in today’s economy.
One solution is to consider downsizing to an independent living community. “People often think senior living is expensive, but it can actually save homeowners money,” says Jon Aldridge, executive director at Mennowood Retirement Community in Newport News. “Residents at Mennowood don’t have to pay for food, housekeeping, laundry services, lawn care, electricity, cable TV or telephone. The savings really add up.”
Another great thing about downsizing to a community like Mennowood is that you’ll no longer need to worry about chores like painting, raking leaves or shoveling snow. You also won’t be surprised by unplanned emergency expenses like an outdated furnace or water heater that suddenly quits on you. You can spend all your time living a more enjoyable and active lifestyle without the downfalls of owning a home.
Check into an independent living community, and see all the benefits it can provide to ensure a happier and healthier lifestyle for your future.