Worried You’ll Outlive Your Retirement Savings? Try These 5 Strategies to Stretch Your Funds
5 savvy ways to stretch your retirement savings
The average life expectancy in the U.S. is 78.7 years old, with women tending to outlive men by a few years. But this number gives no real indication of how long you will live — and how much money you’ll need during retirement.
A recent study revealed that nearly half of Americans fear they’ll run out of money after they leave the workforce — and with good reason. With the growing cost of living, decline of pensions and longer life expectancy, workers approaching or just entering retirement need a strategy in place for spending (and conserving) their funds. Here are five savvy tactics that can help you manage the risk of outliving your income in retirement
- Work longer. This one is a no-brainer for anyone still in the workforce. The longer you work, the less retirement years you’ll have to fund. Instead, you can continue making contributions to your retirement account, while enjoying a steady paycheck to cover your regular expenses.
- Take advantage of catch-up contributions. Beginning the year you turn 50, the IRS lets you make “catch up” contributions to your IRA and 401(k) accounts. The maximum amounts are adjusted every year. For 2021, the catch-up amount for a 401(k) is $6,500 and $1,000 for an IRA. If you’re a little bit behind in your retirement savings, these contributions can improve your account balances in the years leading up to retirement. Plus, the tax deduction you can claim on these catch-up contributions can save you even more. Not tax advice. Consult a professional.
- Delay collecting Social Security as long as possible.* You may be eligible for Social Security beginning at age 62, but you can only cash in on a portion of your benefits if you start collecting them at that time. Waiting until you reach full retirement age ensures that you can collect 100% of what you’ve built up. For example, if you start collecting at age 62, and your full retirement age is 66, you'll miss out on 25% of your maximum benefit every month for as long as you live. If you can swing it, waiting is worth every penny.
- Consider an annuity for a stable source of income. Annuities are essentially an insurance product. To avoid outliving your retirement savings, you hand over a lump sum to an insurance company to provide you with an income for the rest of your life, on a schedule that you determine. Monthly payments are based on your age and the current interest rates when you buy. There are many different types of annuities, some more suitable for retirement income than others. It’s important to speak with a financial advisor to determine which one may be a good option for you.
- Leverage your home equity with a reverse mortgage loan. If you’re a homeowner age 62 or older, a reverse mortgage loan can be a smart financial tool to free up the cash you’ve built up in your home. You can access these funds as a lump sum, monthly payments or a line of credit that’s there when you need it, all while continuing to live in and own your home.† Just like a traditional mortgage, you’re still responsible for loan obligations, including property taxes and insurance, as well as basic home upkeep and repairs.
Solving the retirement money challenge
A reverse mortgage loan from Reverse Mortgage Funding, LLC (RMF) can enhance your retirement income to maintain the lifestyle you’ve worked so hard to achieve. To learn more, call RMF today at (888) 277-1567 and schedule a convenient, in-person appointment with a loan specialist in your area.
This content is sponsored by RMF, one of the nation’s leading reverse mortgage lenders. We are dedicated to helping older Americans retire more freely, in the comfort of their own homes. As a result of our commitment to providing an extraordinary and positive customer experience, we have earned a 98% customer satisfaction rating; a 4.8-star / Excellent score on Trustpilot; 4.8 out of 5 stars on LendingTree; and an A+ rating with the Better Business Bureau. Call 888-277-1567 to speak with a licensed reverse mortgage specialist to learn about our retirement financing products and solutions.
This information is intended for those who are interested in financial education. This information is provided for convenience only, and RMF make no warranties concerning the accuracy or completeness of any of the information. Information is subject to change without notice, and RMF is under no obligation to provide updated information. Materials or statements made by a third party and located or posted on the Site are those of the third party and do not necessarily reflect the official policy or position of RMF. This is not financial, tax, compliance or legal advice and should not be taken or relied upon as such. Each individual should consult with his/her financial, tax, or legal professional. All mortgage origination services are provided by Reverse Mortgage Funding LLC, a state licensed mortgage lender, which is licensed or otherwise exempt from state licensing in the states in which it originates mortgage loans.
*Consult a financial professional. Visit www.ssa.gov
†Borrowers who elect a fixed rate loan will receive a single disbursement lump sum payment. Other payment options are available only for adjustable rate mortgages.'
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If you have equity in your home and believe you meet the eligibility requirements, a HECM may be the option that could help you retire smart.