By | May 6, 2019

financial security in retirementAm I going to have sufficient money to retire?  That is the #1 financial concern among 66 percent of Americans, according to a Gallup poll, even though many of them have long-term retirement savings plans.

I recall when I was always checking my retirement nest egg to see if it was ready to hatch or if I needed to incubate it a bit longer.  I can’t imagine what it’s like for millions of Americans nearing retirement age who haven’t saved.  These Americans will often outlive their assets, and then what?

I’m thankful for a job that provided retirement benefits, and I’m even more thankful for a spouse who had the foresight to think about our old age when we were young.  People really have to take responsibility for their own retirement security, and not wait until age 50 to begin.

A helpful way of thinking of it is to consider saving for retirement as a second job.  Here are some strategies to achieve or work toward to help retire with security:

  1. Be debt-free before you retire. Take stock of your situation and create a plan to reduce your debt immediately.  Your retirement may need to be delayed accordingly. Many experts still recommend owning one’s home before or at retirement, or downsizing.  What works best for you?
  1. Design a budget for saving and spending (this is a must for everybody really).  Don’t just spend what comes in.  Once retired, many professionals recommend a 4 percent spending rate of your retirement savings, which (accounting for interest and inflation) should last for 30 years.
  1. Think twice before leaving the workforce. Make sure you are ready because it will be harder to get a job once you’ve left it.  Be sure you know what benefits will follow you into retirement.  Medical?  Pension?  Be careful if you are offered a buyout, which often happens to enable companies to replace older, higher salaried employees with younger less expensive junior employees.
  1. Optimize your tax strategies, such as using appreciated stock or mutual funds to make charitable contributions of $1,000 or more.  The tax-exempt charity won’t pay tax on your stock profit, and your donation will be tax-deductible.  Consult a tax expert for other ideas.
  1. Don’t be an ATM to your kids or grandkids.  Be smart about how you give away money.
  1. Determine the best time to tap into Social Security benefits.  There are several online calculators available to help you maximize your social security benefits.  We used this social security calculator developed by Boston University economist Laurence Kotlikoff.SocialSecurity
  1. Be prepared for the unexpected.
  1. Have your legal documents in order, such as will and medical power of attorney.  Retirees also should consider investing in long-term care insurance, which typically covers the cost of home care, nursing-home care, and assisted living, usually not covered by traditional health insurance.
  1. Enjoy spending within your means.  None of us know how long we are going to live, so sometimes it’s hard to judge just how much we have and fear sets in that we’ll run out of money.
  2. Consider developing another income stream to help support you during your retirement years.  For example, here are some great ways to make money online.

One solution often suggested is to buy an annuity. An annuity is a pot of your money that an insurance company converts into regular payments until one’s death. But be aware that annuities also involve risks, so again, counsel of a trusted financial counselor is a wise move.



  1. Todd

    I really like your site. I hope more people start reading your site because its scary to think you might be 75 years old and have to return to the work force just to survive. I like the first tip you gave about being debt free. Also number 3, if you can find work that you enjoy in retirement, it wont feel like work and it will help your savings along the way.

    1. Dana Hagstrom

      Thank you, Todd! I’m glad you found it helpful!

  2. Jolie

    I’m in my late 20s, but starting to realize that retirement isn’t all that far away – and the time to start planning towards it really is now, not in my 50s! I’ve been lucky enough to have good savings habits when it comes to money, but I didn’t even think of that tip you gave for becoming debt-free before you retire. I’ve got some money owing on properties that I’ve been neglecting, but my priority now will be to get those paid off as soon as possible!

    1. David

      I commend you for having that wisdom at your age! It always makes sense to eliminate debt, unless that debt is being used as capital in a business which is earning you a greater rate of return.

  3. Phil

    I’m part of these people how have a job with no retirement plan. It’s so hard to put money on the side, two kids, two cars a house. It always seems that every pay day there is nothing in the account after all the automated transfers. Do you have any trick to help put some on the side. I’m only 30 but it is never to soon to begin I guess.

    1. David

      I’m glad to hear you’re only 30 because you still have time to accumulate funds and let the power of compounding work for you. The difficult thing is that you will either have to decrease expenses or increase income to make that happen. I don’t have a trick; it’s hard work, but it will help a lot if you and your spouse are on the same page. I suggest you begin an automated investment program now at a relatively small monthly amount, then work together to increase that monthly amount over time. A good target is to invest 15% of your income for retirement, but I’m sure that seems unreachable right now. I wish you the best as you work out your plan.

    1. David Post author

      Thank you! I hope you added at least one item to your “To Do” list for this week. It’s so easy to put these things off till “someday.” But “someday” never comes.

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