Planning for retirement these days can be daunting. Most 65-year-old baby boomers can expect to live to the age of 84.3 years if they’re men and 86.6 years if they’re women, according to the Social Security Administration. However, a Retirement Confidence Survey conducted in 2016 by the Employee Benefit Research Institute found that 54 percent of workers age 55 and older had less than $100,000 in average retirement savings, indicating that most workers who are retiring in the near future won’t have enough retirement savings to last them through their lifetime.
Outliving one’s retirement fund can be a disconcerting financial prospect for people who have spent decades building up a nest egg, and even more so for those who haven’t saved, don’t have a pension, and aren’t positioned to live on their Social Security checks or current savings. Even if you’re already retired or are approaching that goal, it’s still possible to keep your finances ahead of you. To help you with your retirement savings plan, consider these six ways to make sure you don’t outlive your retirement savings.
1. Ease Your Way Into Retirement
Instead of cutting off your career completely, keep working on a part-time or reduced basis even if you’ve reached retirement age — and take retirement for a test drive. You’ll see if retiring is something you’re ready for, and you might even find an opportunity to try your hand at trades you previously didn’t have the chance to pursue.
“My advice is to get a feel for your income versus expenses and gradually add the activities that you have looked forward to into the income and expense flow,” said Frank Drago, president of Citizens Securities, Inc. and head of Citizens Investment Services. “After working for 30 to 40 years, the tendency is to fill the time with vacations, shopping, increased golfing or other activities — all of which cost money.” Before committing to being retired, workers should first get a good feel for what their ordinary day would look like in retirement, Drago said.
2. Delay Claiming Your Social Security Benefits
If you decide to keep working, consider putting off your Social Security benefits until you turn 70. Delaying them until this age can mean up to an 8-percent higher annual payout in the benefits owed to you. Although you can begin collecting Social Security benefits nearly a decade earlier — at age 62, if you’re healthy, able to work and have a job, don’t be so quick to cash in those benefits if you don’t need to.