If you are freaking out about not having enough retirement savings, you are not alone.
For the majority of people, especially women, retirement is not all sandy beaches and lying around all day.
When it comes to women, one in five working women have nothing saved for retirement. Yes, you read that right, NOTHING!
Your Fear of Running Out of Money in Retirement Is Almost Normal
According to NBC News, 60% of us fear running out of money when we retire. That’s a higher percentage of people’s fear of dying.
And some retirees are even afraid to spend money in retirement. Isn’t this supposed to be enjoyment time?
But not everyone is offered a pension or 401(k), and not having a retirement plan can really put a lot of stress on you.
With people living longer, living paycheck to paycheck, and higher costs on pretty much everything, it makes retiring more difficult.
How Many Retiree’s Run Out of Money
Research from the Employee Benefit Research Institute states “There’s a pretty good chance many Americans will run short of cash after retirement.”
They go on to say that 40.6% of U.S. households between the ages 35 to 64 are projected to run short of money during retirement.
The Employee Benefit Research Institute’s data shows Americans are very ill prepared for a secure retirement. They state that individuals need to make sure they are prioritizing their retirement savings and finding ways to put cash aside for their retirement.
However, you will not be totally broke — you will always have your Social Security benefits (for however long that lasts).
But is that enough to keep up with all of your expenses?
And do you want to be stressing out every month about being able to pay for the things you need?
Know How Much You Need to Save
The National Institute on Retirement states 75% of Americans fall short when it comes to retirement savings.
So how much to you need?
According to Fidelity, you should be saving 15% of your pre-tax salary. But for many of us, that’s just not possible.
Breaking down an exact amount is hard to do because so many factors have to be taken into account — how much will you spend, how long will you live, unexpected expenses for your home, car, medical.
But for a simple example, according to AARP, if your annual pre-retirement expenses are $50,000, then you would want a retirement income of $40,000 annually.
So if you and your spouse collect $2,000 a month from Social Security, which is $24,000 per year, you would need $16,000 a year from your savings.
This doesn’t include any extra spending — things like travel or those unexpected expenses.
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How Can You Accelerate Your Retirement Savings?
Most of the advice I find on increasing your retirement savings suggest:
- Grab the 401(k) match
- Open an IRA
- Automate your savings
- Rein in spending
- Stash extra funds
- Retire in the right state
- Downsize your home
- Pay off debt
Well all of those are fine and dandy if any of those choices are available to you.
They sure as hell aren’t available for me!
Then there is the choice of a second job, or a side job online.
And that’s what a lot of older people are choosing. They are finding a side job to stash away money for retirement.
Some even continue their side business after retiring, while others are already retired and that’s when they get into a side business.
I currently work 40+ hours a week so the last thing I wanted to do is go from one job to another.
No thank you.
However, working online doesn’t feel like another job for me.
This is something that is so enjoyable I don’t even feel like I’m working. I spend time online anyway, so why not make the internet work for me and bring in some extra cash.
Yes, it was a big step and also very overwhelming (it still is) but I figure “hey what the heck, if they can do it, so can I” and I am very determined.
The older generation is really starting to make their mark online. They are doing what they want and they are doing it to meet their needs and desires.
So Stop Freaking Out and Start Doing
Why take the chance of being ill-prepared for your retirement.
Start a back-up plan right now by finding a side job or starting an online business.
This way your retirement may just start looking like sandy beaches and lying around all day.
And remember, an online business can go anywhere you go, just pack up your laptop and head on out.
Have a wonderful day!
