Make these 5 moves to stay out of the poorhouse in retirement

Suze Orman: Make these 5 moves to stay out of the poorhouse in retirement Everyone hopes that, after decades of hard work, they’ll retire rich enough to spend decades more enjoying the fruits of their labor. But if you ask financial guru Suze Orman, the average American is nowhere near ready. Their savings won’t last

Suze Orman: Make these 5 moves to stay out of the poorhouse in retirement

Everyone hopes that, after decades of hard work, they’ll retire rich enough to spend decades more enjoying the fruits of their labor.

But if you ask financial guru Suze Orman, the average American is nowhere near ready. Their savings won’t last decades — they’ll last about three years.

Research by the Transamerica Center for Retirement Studies found the median savings in this country is just $144,000. That might sound like a healthy amount, but seniors 65 and older spend an average of $46,000 a year, the Bureau of Labor Statistics says.

If you want more than three good years, Orman’s book The Ultimate Retirement Guide for 50+ offers five moves you can make today to set yourself up for a happy retirement. Here’s how to get started.

Take a hard look at your finances

Young couple sitting at table looking at bills

Rido / Shutterstock

If you haven’t already, Orman says it’s time to buckle down and take a deep look through your budget.

Compare what you’re spending to what you’re saving. Trim the fat where you can and cut back on any unnecessary spending so you can allocate more to your retirement savings column.

Do you own a home and are you planning to stay in it through retirement? Then Orman says you need to come up with a plan now to ensure you’ll have your mortgage fully paid off before you retire.

Not sure how? A mortgage refinance at today’s still historically low interest rates could save you hundreds of dollars a month and make it possible to get out from under your home loan sooner.

Downsize your home

Custom built luxury house with nicely trimmed and landscaped front yard, lawn in a residential neighborhood. Vancouver Canada.

romakoma / Shutterstock

You may have plenty of sentimental reasons to want to stay in your current home, but if it’s more space than you need and you can make money off of it, you may want to consider selling now.

Not waiting until you have to sell the house makes sense, Orman says, because if you invest the profits now, you’ll accrue much more interest than if you waited another 10 or 15 years.

“I don’t want you to wait till you’re 60 or 70 to sell this home,” she says. “I want you to downsize right now, so that you can start saving more money right now.”

While some may hesitate to part with their family homes, a smaller space is easier to clean, cheaper to run, will cost you less in homeowners insurance and will be more accessible as you age.

Beef up your emergency fund

Closeup of US dollars in paper clip on white background with note written EMERGENCY FUND

Ariya J / Shutterstock

Financial experts typically recommend you have an emergency fund of at least three to six months’ worth of living expenses, Orman actually recommends you make that two or three years.

Yes, three years’ worth of expenses in an emergency fund.

Her reasoning is that if the market ever takes a downturn, you’re not going to want to be withdrawing from your retirement accounts until it bounces back.

With a substantial emergency fund you’ll be able to get by until it’s once again safe to take out funds from your retirement account. If you need a little help setting up your emergency fund, you can turn to a fiduciary financial adviser.

Invest in a Roth IRA

Senior couple browsing the internet together

bbernard / Shutterstock

To avoid paying tax when you take money out of your retirement account, Orman recommends you go for a Roth IRA account.

“Later on in life, you want to be able to take that money out tax-free,” she explains.

Because your contributions to a Roth account are made after tax, you won’t have to deal with deductions when you withdraw. Traditional IRAs, on the other hand, aren’t taxed when you make contributions, so you end up paying later.

However, the IRS does set limits on how much you can contribute and who can contribute. You’ll need to have an adjusted gross income under $139,000 or $206,000 for married or joint filers.

Most banks and brokerage firms offer these accounts. And if you’re not keen on making the big investment decisions yourself, you can always open an IRA through a robo advisor that will manage your retirement account for you.

One popular robo advisor will even let you boost your account by investing your “spare change.”

Update your investment portfolio

Young man faces older couple, sitting in office, discussing business

fizkes / Shutterstock

Taking a “set it and forget it” approach to your investment portfolio rarely pays off. You have to regularly revisit your portfolio and make sure it’s still in line with your financial goals and timelines.

Check in with your financial adviser to ensure the balance you’ve got of cash, stocks and bonds is the right amount for your retirement goals.

And keep your costs down by downloading an investment app that offers low- or no-commission trades.

Orman recommends either stocks or exchange-traded funds ETFs that pay dividends. So even if the market sees a downturn, your investments will still provide you some income.

“If you happen to hit a patch where the market starts to go down, you want these stocks to still provide income for you,” she says.

The moral of the story

A happy senior couple sitting on the front of a sail boat on a calm blue sea

Spotmatik Ltd / Shutterstock

When it comes down to it, the greatest threat to your comfort in retirement is not the stock market, how much you have saved or exorbitant spending — it’s you.

Orman says it’s normal to make a few missteps along the way, but if you want to retire comfortably one day, it’s time to get learning. Whether you do the research yourself or work with a professional financial adviser, the more financial education you seek out, the less likely you are to mess up.

“The biggest mistake you will ever make in your financial life are the mistakes you don’t even know that you are making,” Orman says.

This article provides information only and should not be construed as advice. It is provided without warranty of any kind.

Source link

The Fund Times

Posts Carousel

Leave a Comment

Your email address will not be published. Required fields are marked with *


  • john mary
    October 22, 2021, 4:19 pm

    Hi, I just want to share my experience witheveryone. I have being hearing about this blank ATMcard for a while and i never really paid any interestto it because of my doubts. Until one day idiscovered a hacking guy Harrison. he is reallygood at what he is doing. Back to the point, Iinquired about The Blank ATM Card. If it works oreven Exist. They told me Yes and that its a cardprogrammed for only money withdraws withoutbeing noticed and can also be used for free onlinepurchases of any kind. This was shocking and istill had my doubts. Then i gave it a try and askedfor the card and agreed to their terms andconditions.. Four days later I received my card andtried with the closest ATM machine close to me, tomy greatest surprise It worked like magic. I wasable to withdraw up to $5500 daily. ATM has reallychange my life. If you want to contact them, Here is WhatsApp him +15593840001 or Email: [email protected].

  • amber
    July 4, 2022, 7:00 pm

    I got my already programmed and blanked ATM card to withdraw the maximum of $1,000 daily for a maximum of 20 days. I am so happy about this because i got mine last week and I have used it to get $20,000. Mike Fisher Hackers is giving out the card just to help the poor and needy though it is illegal but it is something nice and he is not like other scam pretending to have the blank ATM cards. And no one gets caught when using the card. get yours from Mike Fisher Hackers today! *email [email protected]


Latest Posts

Top Authors

Most Commented

Featured Videos