There’s no secret that America is facing a retirement crisis, and the severity of it might surprise you. Are you aware that almost half of the American population won’t be financially prepared for retirement?
This worrying situation was reported by Boston College’s Center for Retirement Research, who created the National Retirement Risk Index. The index discovered that approximately 50% of U.S. households won’t maintain their current living standards after retirement – even if they remain employed until they’re 65.
So, are you ready to retire? And how can you prepare for it?
Here are some suggestions:
Professionally double your money
Wondering how to double your savings on the path to retirement? A professional can aid you in this. According to a Vanguard study, a hypothetical investment of $500,000 over 25 years would become $1.7 million when managed personally. However, this amount could increase to over $3.4 million under the management of a financial adviser – that’s double! Consider using the free service from SmartAsset if you have at least $100,000 in investments. By completing a short questionnaire, you’ll be matched with up to three vetted local financial advisers, all obliged to act in your best interest. Even if you don’t require investment advice, an adviser can help lower your taxes, create a comprehensive financial plan, maximize your Social Security benefits, and provide a second opinion to ensure you’re on the correct path. Using SmartAsset only takes a few minutes, and often leads to a complimentary consultation. Make sure to review the methodologies used in Vanguard’s white paper, Putting a value on your value: Quantifying Vanguard Advisor’s Alpha.
Guard your house against unforeseen expensive repairs
Unanticipated home repairs can quickly drain your savings. One moment everything seems fine, then suddenly, something breaks down. Whether it’s air conditioning, a washer or dryer, plumbing issues, electrical faults, or even a leaking roof, repairs can be costly. Thankfully, American Home Shield, a home warranty company, can help you avoid large repair bills. Regardless of their age, they can protect everything from household appliances to your electrical, plumbing, heating and cooling systems. With plans covering up to 23 appliances and systems, they’ll replace any item they can’t fix. This is why they’re America’s leading home warranty company, boasting over 17,000 contractors and two million members. They offer various plans to suit every budget. Input your zip code here to get a free quote.
Diversify with gold before a market crash
If all your savings are invested in a 401(k), IRA or brokerage account, a sharp stock market drop right as you retire could be devastating. Keeping all your wealth tied to one type of investment – be it stocks, bonds, or crypto – can lead to losses rather than gains. Diversification ensures financial security. Consider investing in gold or other precious metals which usually perform well during stock market crashes. Choose your gold dealer wisely. Some dealers inflate their gold and silver prices. In contrast, Oxford Gold Group holds a 4.9-star rating (out of five stars) on Trustpilot, where 96% of reviewers rated the company as “excellent” and 4% as “great.” It also has an AA rating with the Business Consumer Alliance and an A+ rating with the Better Business Bureau. They offer investments in Gold IRAs adhering to IRS regulations, alongside options for gold bars, coins, silver (including silver IRAs), platinum, and palladium. Consider giving Oxford Gold a shot if you’ve ever thought about investing in gold.
Prepare for what Medicare doesn’t cover
Here’s something often overlooked about retirement: according to the U.S. Department of Health and Human Services, seven out of 10 people turning 65 today will likely require some form of long-term care as they age, which can be incredibly expensive. Contrary to popular belief, Medicare doesn’t cover long-term care — and covering these costs could rapidly deplete your savings. That’s where long-term care (LTC) insurance comes in handy. GoldenCare is a great place to find LTC insurance, except if you reside in Alaska, Florida, Hawaii, or Washington, as they don’t offer policies there. The median cost for home health aide services in the U.S. is a staggering $27 per hour, as reported by the latest Cost of Care Survey conducted by Genworth Financial. That equates to $4,536 per week or $18,144 per month based on 24-hour care! Remember, signing up when you’re younger means lower costs. So consider taking a moment to check out GoldenCare now.
Maximize your retirement savings
If your employer offers a 401(k) plan, make sure to fully utilize any company match. Otherwise, you’re missing out on free money. Try to save as much as you can. Vanguard reports that the average contribution to their 401(k) plans in 2022 was just 7.4% of income, well below the recommended 10% to 15%. If you don’t have access to a 401(k) plan, open an IRA and aim to maximize your contributions. This money will grow tax-free until retirement. Once you reach 50, use “catch-up” rules to increase your savings. For 2023, the 401(k) contribution limit is $22,500, or $30,000 if you’re 50 or older. For IRAs, the annual contribution limit for 2023 is $6,500, or $7,500 if you’re 50 or older.