My aunt just turned 90 and her guaranteed income from her annuity finished at 90. She has outlived her money and now has to get used to living on the pension. How long will your retirement savings last? What could you do to put more into your savings to make your nest egg last longer? Why you could even retire sooner if you get your strategy right.
You need to spend some time planning the type of lifestyle you want to enjoy in retirement and how much money your investments will need to earn to provide you with each year. If you find you are coming up short of money then perhaps you could generate some extra funds for retirement. Here are 7 options:-
1. Keep working past retirement age either full time or transition into retirement by working part time;
2. Have investing strategies in place like investment properties;
3. Supplement your retirement with a business. Either off-line or on-line. What could you do? For example become an agent and sell Herbalife or Avon, having a shop on eBay is becoming popular. If you can generate an extra $800 per month/$9600 per year can be the equivalent to having saved $240,000 towards retirement assuming a 4% return on your money. (The formula to work the equivalent savings out is divide the extra yearly income $9600 by 0.04 (assumed return))
4. Releasing equity in your home. This can be achieved by either down- sizing and investing the excess funds for your future or taking out a reverse mortgage and spending the kids inheritance. A one level dwelling is most popular for retirees.
5. Save more now. Cut your spending to increase your savings. What could you do to cut your spending?
6. Take in a lodger to supplement your living expenses. If you are on your own this can make a lot of sense to rent out a room. You will get some company and some extra money.
7. Join an investing club and learn how to trade shares on the stock market. In my town the local University of the Third Age (U3A) run a Successful Investor Course to teach how to buy and sell shares. Ask around and see what is available to learn in your town.
We need to recognize that the population and demographic changes will affect us all. The qualifying age for the Aged pension is rising. For some suggestions buy my book, Retire Well, Retie Happy, where you will find interviews with leading experts in their fields. Spend some time planning and educating yourself now will give you more choices later on.http://www.annnelson.com.au/store.html