Live Long and Prosper?

"People are living in retirement much longer than previous generations. And it's happening at a time when Social Security and pensions are becoming less secure."

That's a quote from a recent CNN Money article in which financial advisors paint a picture of one problem facing Baby Boomers. If this generation ends up living as long as many predict, they need to have more than one-and-a-half times the projected amount in their retirement savings account to maintain their lifestyle.

But this issue isn't as simple as life expectancy. Another factor of this equation is that Social Security isn't so secure.  So, what can you do if you're on track to live to 100 without the financial security of the government?

Below I will share with you some principles that we share here at Victory in our Financial Peace University Classes taught by Dave Ramsey.

1. Don't worry. Dave has explained countless times that you should plan for retirement as if you won't get anything from Social Security. That way if it does go belly up, you'll be fine. But if the government manages to make it work, you'll be set.
2. Work longer. To maintain the kind of lifestyle you want throughout retirement, you might consider working longer. CNN Money reports, "The finanical gains from an additional year of work are really impressive." CNN Money also reports that, "According to surveys from the Association for the Advancement of Retired Persons, more than two-thirds of 50- to 70-year-old workers plan to work into their retirement years or never retire."
3. Save more. After you've completed Baby Steps 1, 2 and 3, invest $3,000 per year in a Roth IRA ($6,000 per married couple each year). Roth IRAs grow tax free, so you get to keep all the money you invest there. The only exception to investing in a Roth IRA is if your company matches your 401(k). You will always want to take that first. Just make sure you're investing at least 15 percent of your income once you make it to Baby Step 4.
4. Spend less. To save more, you may have to spend less. Rein in your spending by cutting corners on certain items, buying used, and sticking to your budget. Selling things on eBay and having garage sales can also help you bring in a little extra cash that you can contribute toward retirement savings.

Stick to a solid plan now and you'll be maxed out on your savings and ready for a long, enjoyable retirement.

Comments

[Sidney Rooks]

I'm gonna have to take that class when i get a bit older. That sounds like it's gonna help a lot. God Bless and love ya!
Sidney Rooks