How to Fill the Gaps in Your Retirement Savings

Let’s talk about how to fill the gaps in your retirement savings. So, retirement planning always comes down to, what are your expenses, anticipated expenses in retirement and then do you have sufficient income? So often, people are always focused solely on, well how big to I need to get my retirement savings to be successful with retirement? Well, no it really comes back to what are those expenses going to look like and then what are those different income sources between Social Security, maybe a pension and then how does your retirement savings sort of help supplement that and figuring out a big picture what that looks like over time. So again, start with your expenses and maybe it’s time to evaluate what are some of those, you know, optional costs that you might be able to cut? Are you doing doing too much of this or that and really don’t need to be spending money in that way. One of the big areas that we stress is eliminating debt. Credit cards can get you into a lot of trouble. I think that’s probably over the 18 years I’ve been here at Centennial Wealth one of the biggest areas that I’ve seen that creates complications with your retirement plan is when you have that credit card debt. You know, another area you want to consider is boosting your savings. I mean is there a way where you could carve out say an extra couple of hundred dollars a month and based on, oh if you were to get a say a 7% return on that over the next 15 years, that could be an additional $63,000 when you look at that. Again, consider boosting your savings. Evaluate those reserve funds and what… you know, what sort of interest are you earning on those? Nowadays, with a lot of the banks and credit unions and everything are coming out with higher interest crediting options and even government bonds are out there. So there’s different options that have increased the amount that you could or should be earning say on your savings or money market accounts. So definitely be looking into that. You may need to consider adjusting your retirement date. If you’ve run all these numbers and looked at where you are and what your expenses are and you can’t really cut anything further, well, perhaps you may have to continue working x number of years longer to build up that savings and maybe cut out some of those costs. Or should you change some of those retirement assumptions. Is it necessary possibly to relocate if the cost of living just isn’t going to work for your retirement. There’s all sorts of reports out there. Okay where are the lowest cost areas to live? And Northern Michigan is one of the higher cost areas. So consider reducing your expenses, working part time. All of these are different ways to help you come up with a plan to make sure that you have a sustainable and predictable retirement income. So if you have questions on this or need any help, you’re welcome to give us a call here at Centennial Wealth Advisory.