What If You Can’t Save More Money?
I have written several times in the past few months on this blog about how Americans are saving money at a rate we haven’t seen in years. I’ve also discussed the need to save more money to have emergency funds available, to replenish investment accounts that suffered market losses, and to be able to weather future economic storms more easily. If you have found a way to increase your monthly savings, that’s great. However, the reality is that there are millions of people for whom it is absolutely impossible to save more money right now.
What if you aren’t in a position to save? What does it mean for your long term financial situation? This is a real concern for people, especially when the clock is ticking and retirement is on the horizon. Your personal savings will be a big factor in the type of retirement you enjoy, but consider these other alternatives if you’re unable to save money right now.
- Use Your Home: If you own your home, there are a few ways that you can use it to generate income during your later years. If you want to stay in the home but need cash, a Home Equity Loan is an option, although those are harder to get than they used to be. Many retired people also consider a reverse mortgage in order to avoid moving out of their home. This option includes pros and cons that you should consider carefully before making a decision. Finally, if you’re willing to downsize to a smaller home or a condo, you can use the money from the sale of your home to fund your retirement, and maybe even reduce the amount of yardwork you have to do later in life.
- Continue Working: Just because your ideal retirement age is 65 doesn’t mean you have to stop working entirely. Many retirees find themselves heading back to the workplace for a variety of reasons. You could consider working longer in your current career or finding a part time job to supplement your other income. If you can delay receiving Social Security payments by even a year or two, you make those payments higher for the rest of your life.
- Adjust Your Lifestyle: Most of us dream of a retirement of travel, golf, and other exciting adventures that we don’t get to enjoy as much during our working years. When the time comes to retire, many people aren’t in a position to do as many of these activities as they would like to, and that’s ok! There are other hobbies that you may enjoy just as much that cost much less. This adjustment is much more of a mental adjustment than a financial adjustment, but it’s one that can make your retirement years much more enjoyable and fulfilling if you don’t have adequate savings to fund your “dream” retirement.
Many of the people who aren’t currently in a position to save will find themselves in a better position a few years from now. When it comes to saving for retirement, earlier is always better, but late is better than never! If you’re not in a position to save today, don’t lose hope, but understand that you may need to be flexible and take advantage of other financial tools and resources during retirement.
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Tags: Income, retirement, saving, seniors
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