7 Things That Can SAVE Your Retirement from “Brokeness”

OK so maybe “Brokeness” is not a word but when you read it you know what it means. You don’t want to be “broke” in retirement barely having ends meet.

What do you want to be doing in your retirement? Traveling? Playing with grandkids? Enjoying your home without having to move to a trailer park?

Here are 7 epic things that can help you with your retirement…

Double down on saving more money as you get closer to retirement. The kids are gone. You have paid off your mortgage or are close to it. Save more now while you are still working.

Money money money

And stop making excuses about it. Just bite the bullet. Would you rather save more now or be a greeter at Walmart during retirement? (and no I’m not knocking Walmart greeters… just the idea of working when you are supposed to be “retired”)

Get serious about calculating how much money you will need in retirement. Most online free retirement calculators are junk. They don’t cover everything. They leave out a lot of important items. Can you inject the sale of a business? What about life insurance? Can it cover multiple rental properties? Does it even cover your spouse? Most of them don’t handle tax calculations very well and often leave out RMD calculations.

Also many online retirement calculators are just fronts to market to you. Find something that installs on your computer locally (hint hint). It will be more private, more secure, more accurate, and more comprehensive. If you’ve saved hundreds of thousands of dollars, does it really make sense that you can use a “free tool” to do some real planning that is useful?

RetirementView Screenshot

OK yes that’s a shameless plug for the best retirement calculator on the planet – RetirementView… but after all this is our website 🙂

Consider downsizing your home and your lifestyle. Do you really need that 4 bedroom house for 30 years in retirement along with all the extra utility bills and taxes? I personally would prefer to stay in the house that I raised my kids in, but if the finances don’t support it we will have to rethink it. (go back to item 2 to run the numbers)

Family in Front of House

If you downsize from a $450,000 house to a $225,000 condo, you can pull out $225,000 from your equity. Then invest that in a longer term market allocation. Yes as your long term money that you tap later in retirement.

If you get 5% on that for 10 years that little equity egg will be worth $342,218. If you average a 6% return for 10 years that will grow to $374,330. That’s not chump change!

Convert some of your IRA or 401(k) to the Roth IRA. Why? Because withdrawals from a Roth IRA are TAX FREE! But withdrawals from your regular IRA are taxed at the full ordinary tax rate.

High Taxes

You will pay taxes NOW to make the conversion, but taxes are at historic lows. Based on the crazy spending of our federal government, it is very likely taxes will be going up. Pay that lower tax bill now and then reap the rewards in retirement.

Mom and Two Kids Life Insurance

If you are healthy AND married, get life insurance. Life insurance can help with the longevity problem of retirement (i.e. outliving your money). If you have say $500,000 in life insurance that is not cancelleable, then the benefit left to your spouse can nearly ensure that they won’t go homeless AND help them with any nursing or long term care needs.

I have seen people in my own family without enough savings and they struggled in retirement. And on top of it they had no life insurance! If they would have had a few hundred thousand in life insurance, they would have not struggled at all.

Save big on some retirement travel by working with ministries and non-profits who want and need your help typically overseas. This lets you increase your travel without busting your budget, while at the same time “doing good” and helping others.

We know one couple that serves for 6 months at a time for a ministry… in HAWAII! All of their housing is included. Yes they do work for the ministry. It’s not all 100% vacation, but it’s like living there enjoying Hawaii without a huge bill.

Trip to Hawaii Beach

If you are reading this and you know of other such opportunities, email me and I might start a listing on the site of available options.

One last resort if you are having trouble with your retirement finances, look into a “reverse mortgage”. You get to still live in your house but borrow against the value for living expenses.

Reverse Mortgage

If you have no heirs at all or at least none you care about, then this is definitely something you should look into. Being able to tap another $100k or $200k might make the difference between eating catfood and just living your normal retired life.

There you have it… 7 strategies to ponder so that you don’t reach a state of “brokeness” in retirement… ok so we just mean “don’t go broke”!

Thanks and Happy Planning!

NOTE: As always these are general suggestions and not meant to be actual financial advice. Use RetirementView to run calculations and also consider consultation a financial professional.

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