What to do if Retirement Savings Aren't Enough

Five Ways to Improve Potential Retirement Income & Avoid Shortfalls

Jan 19, 2010
Carol Finch

What to do if Retirement Savings Aren't Enough - hortongrou

Those approaching retirement may find that their retirement savings aren't going to deliver enough for them to get by. What steps may help to boost retirement income?

Many people getting close to retiring worry that the retirement savings they’ve built up aren’t going to be enough for their needs. By this late stage, however, further savings alone may not give a fast enough return. Are there other ways to improve retirement income later in life?

Five Ways to Improve Retirement Income

There are some solutions which may be useful for individuals in this situation. They could, for example, follow one or more of the following five options.

Defer retirement: Delaying retirement for a few years could allow additional contributions to boost existing savings accounts. Not making withdrawals for a few extra years could also improve on overall return on investment.
Plan on part-time working: It’s quite common for retired people to take on a part-time job nowadays. This can be a useful source of extra income and many find that it also helps keep them active and occupied.
Move home: Many people spend their retirement in larger homes than they actually need. Moving to a smaller property may free up useful cash that could boost retirement income.
Consider a reverse mortgage/equity release: Those that don’t want to move from their homes could consider a reverse mortgage or equity release scheme. This may work for some who wish to stay in their homes but access some of the equity in it to spend in retirement.
Assess spending: In some cases making retirement income stretch may involve assessing spending and cutting back to save money. Bear in mind that living costs once retired may, in any case, be lower than when working.

These solutions may not suit every individual but may be useful for some. Those considering a reverse mortgage or equity release option should, however, make sure to assess the advantages and disadvantages before committing to this kind of solution. It may also be wise to take impartial advice.

Using a Retirement Savings Calculator May be Useful

No individual or couple can begin to know how far their retirement savings will go unless they have an idea of how much they will actually be given. Whilst this may be hard to predict with 100% accuracy depending on how far they are from retirement, it may be possible to get a ball-park figure to work with.

There are plenty of free retirement calculators online that may give a useful snapshot of projected income. This may help show any shortfalls or problem areas and may give valuable help with the overall planning process. Making sure that all available retirement savings options are being used may also be a good move.