Plenty of American consumers never developed a savings habit and some who did made the wrong choices for their investments. Yet financial experts say there is still hope for retirement for seniors without significant savings.
Last minute saving techniques for retirement
In a recent reader letter to Money Magazine senior editor, Walter Updegrave, one senior explained his predicament this way:
I'm one of those Americans who are just not financially prepared for retirement. I'm 60, but have very little saved because my money went into my own businesses, all of which eventually failed. I'm now working for a company and participate in its 401(k). But short of winning the lottery, I don't know what to do to be able to retire.
Updegrave compared this individual's situation with that of many others who have opted to invest most of their retirement in their employer's stocks. Updegrave suggests that this reader's story reveals the importance of diversifying investments.
Yet, Udegrave says that the letter-writer still has some options when it comes to retirement, which gives hope to everyone in their 50's and 60's unsure about retirement.
Retirement Strategies for Seniors without Savings
- Senior homeowners can investigate the option of a reverse mortgage. Available only to homeowners age 62 and older, a reverse mortgage is approved based on the equity in the home and the age of the borrower on a sliding scale. A reverse mortgage can generate monthly income, provide a lump sum to pay off debts or a line of credit for use as an emergency savings account. Comparing programs from reverse mortgage lenders can help you decide if this is an option for you to improve your retirement.
- Saving the maximum possible in your employer's 401(k), especially if the employer provides matching contributions. Older individuals are also allowed to make "catch-up" contributions to an IRA.
- Cutting expenses drastically to improve your ability to save.
- Delaying Social Security benefits to maximize payments.
- Delaying retirement or considering working part-time during retirement to increase income.
Regardless of age, every individual should be reviewing their retirement plans each year.
Michele Lerner is a freelance writer with twenty years of experience writing articles and web content for newspapers and magazines on topics related to real estate, personal finance and business. Her clients include The Washington Times, Urban Land Magazine, NAREIT's Real Estate Portfolio, and numerous Realtor association publications. Michele's first book, "HOMEBUYING: Tough Times, First Time, Any Time" is available now at Amazon.com or from www.MicheleLerner.com