As Baby Boomers near retirement age, many realize they don't have enough saved up to retire comfortably. In fact, 40% of Boomers agree that they haven't done enough to save for retirement.
If you find yourself in this situation, try not to panic! There are steps you may want to take to turn things around and get on track for a comfortable retirement.
Keep reading to learn how Baby Boomers can overcome potential savings shortfalls by exploring various ways to top up their savings in preparation for retirement:
Why Baby Boomers Don't Have Enough to Retire
There are several reasons Baby Boomers are struggling to save enough for retirement.
For starters, many Boomers were hit hard by the 2008 Great Recession, with many losing jobs, homes, and other assets. And even before the recession, many Boomers were already behind on their retirement savings, having not started saving until later in life. And now it's become even more challenging to put money aside with the economy in its current state.
In addition, many Boomers may not save enough because they don't fully understand how much they need to save-that's where a retirement calculator may come in handy.
What Can Baby Boomers Do to Catch Up?
The good news is that it may not be too late to start saving for retirement.
Here are some steps you can take to catch up on your savings if you're a baby boomer who hasn't saved enough for retirement:
Maximize Contributions to Retirement Accounts
One of the easiest ways to increase retirement savings is by maximizing contributions to your retirement accounts.
If you have a 401(k) or IRA, consider increasing your contributions as much as possible-the more, the better. Your employer may also offer matching contributions, so make sure you contribute enough to take advantage of this benefit.
By contributing more to your retirement accounts, you can benefit from compound interest and grow your savings more rapidly.
Delay Claiming Social Security Benefits
Social Security benefits can be an excellent source of retirement income for Baby Boomers, but it's critical to time claiming these benefits carefully.
By delaying using your Social Security benefits by a few years, you can increase your monthly benefit amount by up to 8% per year. It's a simple tactic but one that may have a significant impact on retirement finances in the long run.
Cut Expenses and Increase Income
Another way to catch up on retirement savings is by cutting expenses and increasing your income.
Look for ways to reduce your expenses, like downsizing your home, reducing your transportation costs, or cutting back on discretionary expenses like dining out or buying new gadgets (the latest iPhone can wait).
You can also increase your income by working part-time or starting that business you've been thinking of. Every dollar you save or earn can help you boost your retirement savings.
Work With a Financial Advisor
If you're unsure how to catch up on retirement savings, consider working with a financial advisor.
A qualified advisor may help you create a retirement plan and guide you on investing your savings. They might also help you identify areas where you can save money and maximize your retirement income to reach your goal.
Bottom Line
It may not be too late to start saving for retirement if you're a Baby Boomer trying to overcome retirement savings shortfalls.
By maximizing contributions to retirement accounts, delaying claiming Social Security benefits, cutting expenses, and working with a financial advisor, you may be able to start building a better financial future for yourself and your family!
