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Understandably, many Baby Boomers are concerned about saving for retirement, especially given high rates of inflation, rising health care costs, and increased life expectancy.
So what should a retiree do to overcome these fears? Well, probably a lot of things. For one thing, they can save money in smart ways. Here are five strategies experts are looking at for boomers looking to optimize their retirement savings.
Consolidating Retirement Accounts
Trevor Houston, CEO ClearPath Wealth Strategies LLCexplained that since retirees have held multiple jobs over the years, they potentially have five to 10 retirement accounts open at different companies.
He recommended rolling all of these 401(k) plans into one IRA to reduce administrative fees and prevent losses or penalties from forgotten accounts. Some financial institutions also offer incentives for rolling over old 401(k) plans, which can range from 1% to 5% for a cash match.
Creating ‘Forever’ Income
Shavon Roman, Financial Advisor and Chief Wealth Strategist changa plan investmentsaid the most common mistakes boomers make are leaving all their money in their retirement accounts and/or regularly withdrawing money from their accounts and “expecting that bucket of money to last forever.” He warned that this would not happen.
He recommended creating an income that lasts forever by purchasing a lifetime annuity with a portion of your retirement savings.
investment
While many may want to cling to their nest egg for dear life, Roman said boomers’ best bet is still to invest at least a portion of their income in the market. Yes, there is some risk of exposure, but managed carefully, Roman argued, there is also ample opportunity for growth.
Consider income-producing assets such as dividend-paying stocks, real estate investment trusts and bonds.
are getting healthy
“It has nothing to do with money and everything to do with money,” Roman said. He argued that not being healthy has one of the most negative effects on your wallet.
Simple steps like eating a balanced diet, exercising, and getting regular health checkups can help optimize savings both now and in the future.
Editor’s Note: This article is for informational purposes only and does not constitute financial advice. Investing involves risk, including possible loss of principal. Always consider your individual circumstances and consult a qualified financial advisor before making investment decisions.