Boosting your retirement savings

Created date

July 26th, 2011

In a perfect world, we d all diligently save every year of our working lives and retire as millionaires. The reality is many people approaching retirement don t have enough money in the bank. Some people took a hit in the 2008 downturn and others simply didn t plan on living as long as they probably will. Whatever the case may be, if you fear you haven t saved enough for your retirement, you are not alone and there s no need to panic.

Keep cash flowing

If there s a shortfall in your nest egg, an obvious option is continuing to work until you can stash more cash. That doesn t necessarily have to mean slaving away at the office where you ve worked for three decades. Nevada financial coach Todd Tresidder ( says encore careers are becoming increasingly popular as people remain active well into their 90s. Most people find that 30 years of leisure is not their idea of happiness, Tresidder says. An ideal encore career is one where you earn money by doing something you enjoy. If you knit, for example, consider selling your wares at a fair. Another way to generate income during retirement is an investment property, Tresidder says. Real estate doesn t guarantee a payback, but for some people, it can make financial sense. A teacher who is good with a hammer could look for properties that need work and then spend summers making repairs before selling them, Tresidder says.

Invest wisely

It is generally wise to invest more conservatively as you age. But that doesn t mean you should pull your entire nest egg out of the stock market as soon as you retire because you won t need it all immediately. You have time for diversification if you are not going to use some of that money for 20 to 25 years, says Kenn Tacchino, director of The New York Life Center for Retirement Income. A mistake people make is being too conservative by investing only in CDs. Another investment tool that can bridge a savings gap is annuities, Tacchino says. For a lump sum payment now, an annuity can guarantee income later. Or, Tacchino says to consider deferring social security for a few years to receive larger monthly payments. If your savings are coming up short, look for ways to trim your expenses. Your first step should be taking a hard look at every dollar you spend. Florida financial planner Ilene Davis, who invented the Not Just for Retirement calculator (, reminds people not to forget about things like home maintenance and leisure expenses like travel that may increase when you retire. From there, Davis says, develop a budget that matches your priorities. You may also find that volunteering can save you money. For example, Davis says golfers should consider volunteering as rangers in exchange for free rounds. Small adjustments can add up, but one of the best ways to reduce your living expenses is the one you are probably sitting in right now: your house. Hanging onto a large house you don t really need could be what s preventing you from enjoying your retirement.