It was the eve of her 60th birthday when Tammy realized she couldn’t afford to retire.
She was sitting at the kitchen table with a pile of unopened birthday cards… a calculator… and an article on the average cost of retirement…
It hit her like a ton of bricks.
With seven years (and a day) left in her retirement “plan,” she was barely halfway to what she needed to afford a comfortable retirement.
Barely halfway to being able to pay the bills and put food on the table in her golden years…
Of course, she always suspected she was a little behind the bell curve. After all, she was in her 40s when she first contributed to her 401(k).
But she had no idea it was this bad.
To be honest, she didn’t really want to know. But she figured there was no way she could go into her 60s not knowing.
Tammy’s not alone.
About 70% of Americans are behind on saving for retirement — many of them already in their late 50s and 60s — according to a survey by GoBankingRates.com.
As a regular reader of Money & Crisis, I’m sure you know that preparation is the No. 1 tool in our financial arsenal.
But sometimes it’s too late for preparation.
I know all too well just how easy it is to let your finances — and time — slip away from you. (For years, “financial procrastination” was practically a full-time hobby of mine.)
But it’s never too late to make a change. In all my years, I’ve never seen a financial hole that you couldn’t climb out of.
There’s always something that can be done.
That said, if you’re going to save your retirement this late in the game, you’re going to have to take some drastic steps.
You won’t get out of this one with a simple savings trick.
These are the Hail-Mary passes that can save your retirement from disaster.
It’s always going to be tough to say goodbye to a property you’ve owned for a long time.
Especially if you’ve raised your kids there… and filled it with memories.
But having most of your wealth tied up in a big family house severely limits your financial flexibility.
What sense does it make to live in a home that’s worth hundreds of thousands of dollars… and scrape to get buy?
If you sell your house and downsize to a comfortable condo or townhome, you’ll find you have a lot more options.
Right off the bat, you’ll be able to immediately pad your monthly income.
And you have the opportunity to move somewhere with a lower cost of living.
Your money will go a lot further in a midsized town with a low cost of living and all the modern comforts.
Play your cards right and you could even lower your taxes. Wyoming, Alaska, Nevada and Florida all boast taxes well below the national average.
The decision to rent or buy always depends on a number of factors.
In this case you’re going to want to weigh your immediate cash flow needs against the cost of renting in the long run.
But renting has some major advantages when you’re heading into retirement.
For one, it’s going to cut out the cost of home maintenance. And you can say goodbye to worrying about urgent home repairs like leaky roof tiles.
That’s your landlord’s problem now.
This is going to limit any unexpected expenses, which will make it much easier to stick to a monthly plan.
(Note: It’s a good idea to look up reviews of the building’s management online before you rent. Your new apartment might be attractive and modern when you first view it. But if the management are unresponsive or rude, it’s not worth it.)
I’m not going to tell you to go back to work.
The point of this article is to save your retirement… not force you to work forever.
But I know countless retirees on a fixed income who supplement their retirement (part time) from what are essentially hobbies.
The key is to find something you enjoy doing… and turn it into an income.
I know, I know. Easier said than done.
But you have a unique advantage in retirement.
You’re no longer under pressure to pull down a full-time wage… and your retirement income gives you time to get your side gig off the ground.
One of my buddies supplements his retirement making goat cheese in his spare time and selling it at the farmers market.
He only makes about a $1,000 a month, but he loves what he’s doing… And it’s a tidy chunk of change on top of his retirement income.
4. Jim Rickard’s Secret Retirement Strategy
The strategies you read here every day are built on the extensive research of financial expert Jim Rickards.
Jim’s a long time financial prepper and one of the few people who predicted the last financial crisis. So, needless to say, I take his advice very seriously…
In our most recent strategy session for Money & Crisis, Jim told me something shocking… and it has to do with your retirement.
“The global elite will implement a major change to the plumbing of our financial system,” says Jim. “And it will have a huge impact on seniors who are now preparing for retirement.”
But there may be a way to turn this crisis into an opportunity. There’s not enough room to go into Jim’s full strategy in this letter. But Jim will tell you all about it if you click here.
All the best,
Editor, Money & Crisis