Planning for retirement can seem daunting without guidance, especially when it comes to determining how you’ll pay for everything once the time comes. But taking the proper precautions ahead of time can ensure that you save enough to last you for as long as possible. Maximizing your income for retirement is your best bet and there are several ways you can do it. From holding off on social security payments and applying for Medicare to minimizing fixed expenses and considering a reverse mortgage, you have options. Here are five ways you can maximize your income for retirement.
1. Hold Off on Social Security Payments
Starting at age 62, you can begin receiving your Social Security benefits. And while that might be tempting, it’s better to hold off for as long as you can because starting your Social Security benefits too early can reduce the benefit you get both now and in the future. You don’t want to increase your odds of running out of money during retirement, especially if you haven’t been saving as much as you could have in a high-interest retirement account. That’s why you shouldn’t accept your benefits too early and risk running out of money too soon.
2. Apply for Medicare
Healthcare is a major cost of living expense to expect during your retirement years. Caring for yourself when you’re sick can be expensive. That’s why it’s important that you get the medical coverage you need to help you offset expenses. Enrolling in Medicare can help replace or enhance your current insurance and give you certain advantages. Anthem’s cost-effective Medicare options can help ease the financial burden. If you’re anywhere near retirement age, you may be wondering how to apply for Medicare because of the different coverage options. The Social Security Administration has a secure online portal that allows you to apply in just 10 minutes.
3. Invest and Save Your Money
If you’ve still got some time before retirement and you haven’t yet considered investing, now’s probably the time. Automating your savings contributions can help you stay on track to meet your retirement income goals. Make sure you’re contributing enough to meet your employer’s match and that you have either a traditional IRA or Roth IRA. Use a retirement calculator to help you determine how much you should be saving each year toward retirement and to see if you’re on track to get there. When investing, don’t forget to plan for taxes and consider inflation. Your investments should ideally outpace inflation so that you’re not actually losing money.
4. Keep Fixed Expenses to a Minimum
If you truly want to stretch your money out and make it last as long as possible, it’s important that you keep your fixed expenses to a minimum. That might mean sticking to the necessities, such as food, transportation, shelter, and insurance. Anything you don’t really need should be eliminated from your budget. Saving as much money as you can should be your No. 1 priority if you want to be able to retire comfortably and avoid getting a part-time job just to cover your basic expenses. Also, if you have the extra space consider renting out a room in your home, or even downsizing to an apartment.
5. Consider a Reverse Mortgage
A reverse mortgage is essentially a loan. If you’re 62 and older and you have a decent amount of equity in your home, you can borrow against the value of it and receive a lump sum, line of credit, or fixed monthly payment. And the best part is that the money isn’t taxable since it’s a loan. However, one drawback is that you have to repay the loan when you sell your home. And when you die, your spouse or loved ones will be responsible for paying back the loan — but they can simply use part of your life insurance money to pay back the loan.
Now that you know how to maximize your income for retirement, you can begin taking the necessary steps to ensure you can retire comfortably. Whether you choose to keep your fixed expenses to a minimum, invest your money, apply for Medicare, or a combination of the above-mentioned methods, boosting your income for retirement is completely doable.