Life comes at you fast. One minute, you’re throwing your graduation cap into the air, and the next you’re looking up the acronyms your kids use. You may feel that same way when it comes to your retirement, especially if you’re a Baby Boomer. You blinked and now retirement is just around the corner. And that can be a scary feeling if you don’t think you have enough money saved for that chapter in your life.
Practical Ways to Stash More Cash
If you’re a Baby Boomer, the oldest of your generation is 70 and the youngest is 52. That’s a wide age range, but you all have something in common: You need to get serious about your retirement planning! Thinking about what you should be doing isn’t enough. It’s time to take action. Check out these ways to boost your retirement account:
1. Crank Up Contributions
If you’re over 50, you can take advantage of the “catch up” rule. This means that you can contribute an extra $1,000 to an IRA, making the maximum $6,500 a year. You can add an additional $6,000 to your 401(k), maxing it out at $24,000.
2. Consider Selling Your Home
At this stage of life, your kids are leaving the nest. If that’s the case, and you’re behind on your retirement savings, consider purchasing a smaller home. You can use the equity (money left over) to invest. I know there are a lot of memories attached to that home, but memories won’t pay the bills. You’ll still have the memories, no matter where you live.
3. Sell What You Don’t Need
It’s time for a massive yard sale. Get rid of extra furniture, tools and sports equipment. Here are other items you could sell:
- Costume jewelry
- Clothing by the bag
- Collectibles (vinyl records, comic books, old magazines, Star Wars figures, etc.)
- Computer gear (not the ancient, unusable stuff)
- Electronics and appliances
- Books (price in groups, not per item)
Use the one-year rule: If you haven’t worn it, used it, or looked at it in a year, sell it. Don’t feel guilty for getting rid of gifts you got decades ago. And don’t keep everything “just in case.” If you haven’t used it in a year, you probably don’t need it!
4. Earn Extra Income
If you’re serious about preparing for retirement, you may want to take on an extra job temporarily. You could take on some freelance gigs in your area of expertise, or perhaps you could turn your hobby into a money-making side business. Invest the extra money in an IRA until you max out the limits, then talk to an investing pro to decide where to put the rest. Remember, you don’t have to do this forever—it’s just a temporary way to boost your investment income.
Two Other Options
If you’re getting close to retirement and still don’t have enough money saved, you have a couple of options. First, you could work longer. Staying in the workforce a few extra years could make a huge difference in your retirement accounts. Remember, compound interest is your friend, but it needs time to work its magic.
Second, you could delay filing for Social Security benefits. The age at which Baby Boomers become eligible for full retirement increases gradually to age 67. However, you don’t have to retire at that point. You can wait until you are 70 to start receiving benefits. Why wait? Because the government actually pays you more—up to 132% of your monthly benefit!
If you’re a Baby Boomer and haven’t saved much for retirement, you may need to adjust your expectations. You may not be able to take trips to the Bahamas every month, but you still have time to build up a good retirement fund . . . if you’re willing to make the sacrifices and work to get there. Don’t beat yourself up over past mistakes. That won’t do any good. Instead, keep looking ahead and keep doing as much as you can for as long as you can. You’ll get there!