Are you creeping up on retirement age and realizing that you don’t have the savings necessary to sustain that retirement? You are not alone. In 2019 nearly one-fourth of adults in the U.S. represented that they did not have retirement savings.
It’s easy to think you’ll have time for creating retirement savings. There are still actions you can take to retire at 62 with little money. Read on to learn more about how to prepare for retirement when you’re unprepared.
Review What You Have
The best starting point for preparing for your retirement when you haven’t been intentionally working toward the goal is to inspect what you have. Taking a good accounting of everything you have at hand will paint a clearer picture of your true circumstance.
1. Social Security Income
Social Security retirement benefits are available starting at the age of 62. That said, this is not what is considered the full benefits age. Depending on when you were born, you have a specific age that you are able to collect the full benefits.
Prior to that time, you will be allowed to collect a portion of your benefits. For example, individuals that were born in n1960 will reach full retirement benefits at 70. Make sure that you know when your full benefits will take effect and understand what the benefits reduction is if you retire at 62 based on your birth year.
2. Investments
While you may not have been intentionally working toward your retirement goals, you may have some investments that you will want to take into account. Maybe this includes stocks, bonds, CDs or some form of investment income. You want to be sure that these investments are accounted for when making your assessment.
3. Savings Account
Make note of any savings accounts that you might have. This could be simple interest savings, IRA/Roth IRA, 401(k) or money market accounts. Note the current value of these accounts.
4. Real Estate And Personal Property
Whether you have a primary residence, second home or even rental and investment property, know the value. Consider property that you own alone as well as your interest in real estate that you own with others. Take inventory of anything that you have of value such as your car and other items of value that you own.
Sell What Isn’t Important
If you plan to retire when you are 62 and you don’t have the savings to back it up, you may need to take a hard look at what is important to you. You may need to consider selling anything that you don’t really need during retirement.
Downsizing might be the best way to make your goal. You may want to sell your home and move into something more functional that you could pay for outright. You may want to sell your car and purchase a vehicle that is more efficient and less expensive. You could also cash in your CD’s, bonds (depending on the type) and sell stocks.
Reassess How Your Investments Work for You
Make sure the investments that you have are working for you. If you own real estate, be sure that it is income producing.
If you can sell that real estate for a fair profit and put that money into other investments that produce more of a return, it might be time to investigate the options. Reassess your 401(k) and IRAs to make sure that they are working for you the best that they can.
Adjust Your Budget
If you have a budget in place, review it in detail, make adjustments and possible cuts to be sure you are setting aside as much money as you can. Seeking out money management tips on how to reduce spending and increase income can really make a difference.
Consider things such as changing your phone company, adjusting your auto and home insurance and even changing how you shop for groceries. Be sure that you are fully taking advantage of any discounts that you are eligible for.
Now is the time to pay down as much of your debt as possible so that when you go into retirement you have as few bills as possible.
Additional Income
Depending on how much time you have before your retirement starts, you can work to bring in extra money by working a part time job, starting a side hustle, selling items that you no longer need and investing those funds.
While not having significant retirement savings can bring challenges to your retirement goals, careful planning now can certainly help you reach them. The most impactful action you can take to set yourself up for success is carefully assessing the facts of your finances.
