A recent survey by the Employee Benefit Research Institute showed that 16 percent of workers had enough savings for what they would consider a comfortable retirement. This compares to the 27 percent who said that had less than $1,000 in savings and the 54 percent of respondents whose total savings and investments were worth less than $25,000.
The majority of these workers have not tried to calculate the amount of savings they would need for a comfortable retirement, according to the survey.
But all is not lost, particularly for those still working. A recent report by the Wall Street Journal offered advice for those approaching their retirement. The first step may be to remain in the workforce. This increases the number of years a consumer earns income while decreasing those during which they will be dependent on savings.
It also gives them a chance to start saving. The report suggested spending less to save more – and starting early. Saving $1 now could be worth $3 several years down the road. Even small cost-cutting measures will build up over a few years or decades.
Another source of savings consumers should consider is their surroundings, according to the report. By choosing to live in a metropolitan area, individuals will often be forced to face a high cost of living. Relocating can significantly cut expenses for those approaching retirement.
“Even around the big, high-cost cities, once you move outside the commuter belt, real estate prices plummet,” the report said. “And if you are prepared to move further afield – particularly to the middle of the country – you can save even more.”
Those without any other options may consider reversing their mortgage or otherwise running down their assets until they turn 85. They will then be able to apply for longevity insurance, according to the report.
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