When you begin to reach retirement age, building up your savings really takes on a whole new level of importance. You might be facing the prospect of coming up short in your 401-k or other retirement savings, and are wondering with some despondency how youâ€™re going to be able to retire at all, given the escalating cost of medical care, rising cost of living, and relatively poor performance in traditional investments.
The first thing you have to do is put away your despair. It wonâ€™t be that bad. With a little care and preparation, you should be able to at least enjoy those aspects of your retirement that are most important to you. Sure, you may not get to buy that globe-trotting ticket you had dreamed about, but really, even that can probably be pared down a little bit, providing you with at least enough experiences to be satisfied with the life youâ€™ve led.
Itâ€™s important, though, to keep saving up as much as possible in tax-deferred accounts. You may find yourself having to sell some non-necessities, particularly things like expensive cars or other big-ticket toys that you may feel youâ€™ve earned, but in particular if youâ€™re making payments on those items, or on other heavy debts, retirement will be a lot less enjoyable later on. Sure, it might be great to cruise around on that brand-new Harley Davidson, but if you canâ€™t afford to put gas in it, it wonâ€™t be so great, will it?
In the last ten years of your full-time working life, itâ€™s a great time to really sock money away for your retirement. Many retirement plans allow you to make catch-up contributions in these years, so take advantage of them as much as possible.
Finally, work hard to get your debts paid off, and keep them paid off. Crazy, irrational spending will only weigh you down and prevent you from actually being able to relax in your retirement. Get your household budget worked out, and start living at the level youâ€™ll need to retire on, and find yourself much more able to enjoy the fruits of your labor later on. Sure, it may be necessary to work part-time when you retire if you havenâ€™t saved up enough, but these days, itâ€™s actually pretty unusual to see retirees who donâ€™t work at least a little bit to keep themselves busy, active, and to supplement retirement income streams.