IT'S YOUR MONEY: How to plan when you didn't plan

by name Newspaper - Published: August 26, 2013 | 6:30 pm 0

Retirement is a goal for just about everyone.

Even if you love what you do so much that you never plan to stop working, it's good to have the financial ability to retire if you decide to.

If you realize now that retirement is coming up but your financial options fall short, there are some things you can do to make retirement more than a dream.

Look at what you can change in your current situation. Cut your budget so you can start putting money into your retirement nest egg.

First, adjust the easy things where you know you could spend less. That may mean eating out less, forgoing a new outfit or scaling back on vacations.

Then look at big changes. Could you downsize your house? Can your car last a few years longer than you'd originally planned? You may have some luxury items that cost you money that you could do without and that you don't feel are worth delaying retirement to keep supporting.

Once you've reduced expenses, consider looking at your household earning power. If you are married or in a committed relationship and only one of you is working, consider both working. It doesn't have to be two high-powered careers. But if you're used to living off one income, the second income all can go toward retirement savings.

Changing your game plan on retirement can give you even more financial traction. Traditional retirement is sometimes referred to as cliff retirement, meaning that people climb to the top during their working years, then jump off the cliff. With all of us living longer, it may make more sense to think of retirement as a hill. Climb to the top, then go down the other side. In other words, don't just stop working, taper off your working over several years. Any time you can cover your basic living expenses without dipping into your retirement nest egg allows more time for that money to grow.

If you take Social Security benefits before the full retirement age as defined by the Social Security Administration, earnings beyond a specific limit ($15,120 in 2013) will reduce your benefits until you reach that full retirement age. If you wait until Social Security full retirement age, you can collect your full benefit, which will be higher than if you collected early, even if you have high income. That can help you catch up on your retirement funding.

Adjusting what retirement looks like can also help bring it closer. A smaller home will help. Part-time work is worth considering. If you were planning on lots of travel, maybe you cut back on the number of trips. You can hit one particular strategy in a full way or combine several. Having options and a plan - even if the plan got started late - can help you retool your retirement goals and make them workable.

-

Linda Leitz is a Certified Financial Planner. You can send questions for this column to gazette@itsnotjustmoney.com.

Retirement is a goal for just about everyone.

Even if you love what you do so much that you never plan to stop working, it's good to have the financial ability to retire if you decide to.

If you realize now that retirement is coming up but your financial options fall short, there are some things you can do to make retirement more than a dream.

Look at what you can change in your current situation. Cut your budget so you can start putting money into your retirement nest egg.

First, adjust the easy things where you know you could spend less. That may mean eating out less, forgoing a new outfit or scaling back on vacations.

Then look at big changes. Could you downsize your house? Can your car last a few years longer than you'd originally planned? You may have some luxury items that cost you money that you could do without and that you don't feel are worth delaying retirement to keep supporting.

Once you've reduced expenses, consider looking at your household earning power. If you are married or in a committed relationship and only one of you is working, consider both working. It doesn't have to be two high-powered careers. But if you're used to living off one income, the second income all can go toward retirement savings.

Changing your game plan on retirement can give you even more financial traction. Traditional retirement is sometimes referred to as cliff retirement, meaning that people climb to the top during their working years, then jump off the cliff. With all of us living longer, it may make more sense to think of retirement as a hill. Climb to the top, then go down the other side. In other words, don't just stop working, taper off your working over several years. Any time you can cover your basic living expenses without dipping into your retirement nest egg allows more time for that money to grow.

If you take Social Security benefits before the full retirement age as defined by the Social Security Administration, earnings beyond a specific limit ($15,120 in 2013) will reduce your benefits until you reach that full retirement age. If you wait until Social Security full retirement age, you can collect your full benefit, which will be higher than if you collected early, even if you have high income. That can help you catch up on your retirement funding.

Adjusting what retirement looks like can also help bring it closer. A smaller home will help. Part-time work is worth considering. If you were planning on lots of travel, maybe you cut back on the number of trips. You can hit one particular strategy in a full way or combine several. Having options and a plan - even if the plan got started late - can help you retool your retirement goals and make them workable.

-

Linda Leitz is a Certified Financial Planner. You can send questions for this column to gazette@itsnotjustmoney.com.

Retirement is a goal for just about everyone.

It's good to have the financial ability to retire if you so choose.

If you realize now that retirement is coming up, but your financial options fall short, there are some solutions.

Cut your budget so you can start putting money into your retirement nest egg.

That may mean eating out less, forgoing a new outfit or scaling back on vacations.

Then look at big changes. Could you downsize your house? Can your car last a few years longer than you'd originally planned? You may have some luxury items that cost you money that you could do without and that you don't feel are worth delaying retirement to keep supporting.

Consider household earning power. If you're a two-adult household, add a second income all toward retirement savings.

Changing your retirement game plan. Traditional retirement is sometimes referred to as cliff. It may make more sense to think of retirement as a hill. Climb to the top, then go down the other side. Taper work hours over several years. Any time you can cover your basic living expenses without dipping into your retirement nest egg allows more time for that money to grow.

If you take Social Security benefits before the full retirement age as defined by the Social Security Administration, earnings beyond a specific limit ($15,120 in 2013) will reduce your benefits until you reach that full retirement age. If you wait until Social Security full retirement age, you can collect your full benefit, which will be higher than if you collected early, even if you have high income. That can help you catch up on your retirement funding.

Adjusting what retirement looks like can help bring it closer.

-

Linda Leitz is a certified financial planner. You can send questions for this column to gazette@itsnotjustmoney.com.

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