Retirement Planning for Low-Savers

Ask any retirement planning professional for their top piece of advice, and you’re likely to hear a familiar refrain: You should be saving more money. That’s certainly true—the more and the earlier you save, the better off you’ll be—but it can also be easier said than done.

You may be in a position where you’re making a relatively limited income; you may have a house payment, student loans, credit card debts, and healthcare costs. You may also have a number of mouths to feed. You’re able to get by and to chip away at your debt each month, which is truly something to applaud—but you may find that you just don’t have enough left over to save for retirement, at least not as much as you might like.

You’re not alone. Saving for retirement can be tough, and the various financial obligations we all face can make proper retirement planning seem like a pipe dream. The good news is that even those who can’t save as much as they’d like can still enjoy secure retirements—and here are a few tips to make that happen:

The most important thing is likely going to be maximizing your Social Security. Say what you will about Social Security: It comes with a government guarantee, and it’s protected against inflation. While you can’t depend on it to provide for all your retirement needs, you can certainly utilize it to augment your other savings—and you should. Get the most out of it, though, by not withdrawing until you reach full retirement age; meeting with a financial planner can help you determine what that age is, for you.

Also consider delaying your retirement until age 66 or 67, filing for Social Security, and suspending the payments until a later date; your spouse can still get spousal benefits, and you’ll still be able to maximize those benefits.

Another thing to consider: Putting the majority of your disposable income toward paying off debts is not such a bad thing, and it’s certainly not impeding your retirement planning. Entering retirement debt-free is one of the most important things you can do, from a planning perspective—so don’t think of those debt payments as depleting your retirement fund. They’re actually helping it, in a way.

Alternatively, consider downsizing—sooner rather than later. We recognize that this might belong in the “easier said than done” file, but if you have a small family and could be just as happy in a more affordable home, why not make your downsize now, rather than during your retirement?

Finally, we’ll add that, with compound interest and a savvy savings portfolio, you can do a lot with even a modest amount of savings. The key is to invest in the best, most dedicated retirement planning. Contact the Stonepath Wealth Management team today to learn more.