No matter your age, the concept of retirement brings with it dreams of replacing your working years with a new life stage. Whatever your vision is for retirement, everyone shares one similar goal: working to ensure you have the income you need to support the life you desire. Of course, everyone’s financial life and goals are different, so the specific strategies you need to implement to create the retirement income you will need depends on your unique factors.
Each generation has its own needs and timeline. As you look toward your own retirement, these key retirement guidance tips can help keep you on track.
GENERATION: BABY BOOMERS
Good news, Baby Boomers: you are living longer than generations before you. That means you will have extra years to enjoy the life you desire in retirement. It also means you will have more years to account for when ensuring you have the necessary income. Even if it is just a few years before you retire, you can still take actions today to help with your retirement income.
66% of Baby Boomers
plan to or already are working past age 65
— or do not plan to retire at all —
and many expect to work part time in retirement.i
1. Pay Off Your Mortgage.
Mortgages can be a huge drain on your budget and available cash flow. While some retirees might choose to leverage their mortgage equity to create additional income, this strategy does not work for everyoneii. Some Baby Boomers might find that choosing to pay off their mortgages can help them create the extra monthly income they need to support their retirement goals.
2. Downsize Your Lifestyle.
As our families grow, so do our homes and lifestyles. However, once children move out on their own, our lifestyles often no longer reflect our true daily needs. Baby Boomers might find that reassessing the size of their houses and number of belongings can help them cut unnecessary expenses from their budgets. By downsizing your home, you can lessen costs, such as monthly mortgage payments, lawn care expenses, utility bills, and more. Start by identifying the lifestyle you are truly comfortable with and the steps you can take to downsize and meet your financial goals.
3. Make Catch-Up Contributions.
Baby Boomers can boost their retirement incomes by making catch-up contributions to their TSP accounts, 401(k)s and IRAs. Those 50 and older can increase annual TSP and 401(k) contributions by $6,500 for a total of up to $26,000. They can also increase IRA payments by $1,000, up to $7,000. Not only will these increased payments help support the desired retirement lifestyle, but they also provide another benefit: additional yearly tax deductions, which can help you save even more money.iii