Don’t stop working

Simple but practical: put off retirement in favor of a few more years of full-time paychecks. Chances are, at this stage of your career, you are earning your largest annual income. It’s your best shot at siphoning off a large chunk of every paycheck for savings. As a side benefit, you may also be postponing going on Social Security, which ensures that your monthly checks, once you begin to claim them, will be significantly larger than if you had starting collecting earlier.

Take some comfort in knowing that you are not alone. 45% of Americans questioned said they may run out of money in retirement. And 15% have no retirement savings whatsoever, according to data from a recent Northwestern Mutual study. Though you’re not in an ideal situation, there are still things you can do to improve your financial picture as you approach retirement. Here are some:

Retiring With Little Or No Savings

Add up your assets

Exactly how much money do you have? Start by counting up your savings, pensions, and 401 (k) or IRA accounts.  Then add in the value of your home, cars, land, jewelry, antiques or collectibles, and anything else that might be sold to generate income in your retirement.

Do some serious belt-tightening

Downsizing your home can be a very smart move. Even if you have paid off your mortgage, and own it outright, your ‘free’ home is probably your largest expense. There is property tax, insurance, maintenance, utilities, and repairs.  Plus, there’s the opportunity cost: you are using money for those expenses that could be invested and earning interest to help build retirement savings.


Chances are there’s enough equity in your property to fund the purchase of a smaller home, with cash left over to invest. It’s a way to eliminate a substantial monthly payment, if you still have a mortgage. And it’s your opportunity to sell furniture and other possessions you won’t be needing. Also consider relocating to a tax-friendly state, to save even more money.

Strike a debt/retirement balance

It can be daunting knowing you’re facing retirement while you’re in debt, but resist the impulse to put all your extra money into paying it off. Remember that your mission is to build a financial nest egg to cover retirement expenses and emergencies. You may be better off dividing your money, using half to pay off debt and half for savings.

Get on Medicare

If you are 65 you are eligible, you should sign up for sure. It covers all or most costs of basic preventative care, diagnostic tests, and treatments. You will be responsible for a monthly Part B payment, which will probably be far less than most out-of-pocket health care costs.

Take Social Security early?

If you do not have savings you may be depending on Social Security as your main source of retirement cash flow. About one-fifth of all retired couples do just that, along with as many as 43% of single retirees. For you, receiving benefits early (age 62) might be a good idea. Remember, though, that your monthly benefit amount will be reduced. If you’re considering taking a part time-job to beef up your income stream, make sure you earn less than Social Security income limits to avoid penalties.  For a detailed explanation, go Here.

Stretch every penny

Lowering the cost of your retirement lifestyle can help compensate for the lack of a nest egg. Downsizing is probably your biggest and best way to reduce expenses. If there is good public transportation available, you might do well to give up your car (and the costs of insurance, maintenance and gassing up).


Here are some other suggestions:

  • Save those restaurant meals for special occasions
  • Pare down the number of cable channels you pay for each month
  • Swap your land line for a cheap cell phone plan
  • Get senior discounts at a multitude of stores
  • Raise the deductible on insurance policies to lower your premium costs
  • Go generic on foods, clothing and drugs
  • Comparison shop your prescriptions
  • Get help with drug costs – see if you qualify Here