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Here’s something even the best retirement guides may not admit: saving for retirement is incredibly difficult. USA Today even named retirement as something the middle class can no longer afford! Stagnant wages, high costs of living, and an avalanche of debt can all compromise your ability to save for retirement, but even if you’re just barely getting by, there’s hope.
Get Financial Counseling
Before you give up on retirement altogether, consult with a trained financial planner. The right planner can help you find a way out even when you’re feeling hopeless. You might find that cutting a particular expense frees up funds, or that working a few hours of overtime helps fund your retirement. In a world where few of us get sound financial advice or education, the right financial planner can be a game-changer.
Look at Part-Time and Hobby Work
The mainstream economy may be floundering, but freelancing is bigger than ever. More than a third of the American workforce is made up of freelancers. If you have a skill you can share, consider consulting on the side, since even a few additional hours of income can be stashed away for your retirement. Love crafting, collecting, or vintage clothing? Try selling online to make some fast cash doing something you already enjoy.
Look to Your House
If you’re house-rich and cash-poor, you may be able to fund a portion of your retirement with a reverse mortgage. However, not everyone is eligible for a reverse mortgage. If you are eligible you could receive cash and reliable income, as well as a chance to finally take a break from the daily slog of the working world.
Cut Your Expenses
No one wants to admit it, but the truth is that we all live larger than we should, and certainly spend more than we need to. Even a small sacrifice can go a long way. That $3 coffee you buy every morning adds up to $1,095 a year. Put that money away every month, benefit from the magic of compound interest, and you may soon have a healthy retirement fund. When you’re contemplating giving up on retirement, it’s time to give up everything you don’t need first, since working forever is simply not an option.
A Little Bit Goes a Long Way
Remember that you don’t have to save up your entire retirement fortune on your own. Compound interest will greatly increase, and eventually multiply, your savings. But to get the most benefits, you need to start early. Even if you can’t foresee saving enough for retirement, save a small sum on a regular basis. This money can help you cut back your work hours, and eventually ease you into a financially stable retirement.
Consider a Different Job
If you’re not making enough money at work, consider a different job. Sometimes it’s just not financially feasible to save on a tiny paycheck, but if that’s the case, it’s time to cultivate a back-up plan. Prioritize employers who offer 401(k) matching as a benefit, since this can add up to a small fortune over the years.
Divert Your Paycheck
Would you notice an additional $20, $50, or $100 taken from your paycheck each month. Probably not—especially if you’re the sort who spends this amount of money on impulse purchases. Once the money hits your bank account, it’s hard to give it up. But if you never see it, it becomes a lot like all that taxable income you’ve paid to the IRS—something that leaves your paycheck before you even see it. Ask your employer to divert a small, manageable sum—such as 1% of your paycheck, or $50 every time you get paid—to a retirement account. If you start sufficiently early, you’ll have a small nest egg well before you reach retirement age.
Annie Doisy is a reverse mortgage expert who helps seniors enhance their lives by taking advantage of the equity in their homes. Annie writes for ReverseMortgages.com where her goal is to educate consumers on a wide range of topics around mortgages and other financial services.
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