Boost savings as income grows. Disciplined savers continually look for ways to save more and there may be no better time than after receiving a raise or bonus. Workers who have access to a 401(k) or other defined contribution plan can save up to $18,000 annually. Even over a short time, those savings can quickly add up, especially with positive investment returns.
Use the catch-up provision. Those who are age 50 or older save an additional $6,000 annually in a defined contribution plan for a total of $24,000. It’s a strategy that is employed more often after a participant pays off a mortgage or finishes paying college tuition bills.
Work longer. Postponing retirement can have many financial benefits such as generating additional dollars for retirement savings and putting off the need to take Social Security. Many pre-retirees have already come to the conclusion that they will need to work longer. The good news is that many experienced workers may be in demand, especially those with hard-to-replace skills. The U.S. economy is expected to face a shortage of five million workers with the necessary education and training by 2020, according to a study from researchers at Georgetown University.
Put off taking Social Security. Postponing Social Security at age 65 or later can boost future payments by 8 percent for every year the income is deferred until age 70, the Social Security Administration reports. Few investment strategies net such a return, never mind one with a guarantee.
Work in retirement. A part-time job in retirement can provide additional income and help stretch savings. More than one-third of people who retired within the past five years say that employment is a current source of income, according to the 2014 MassMutual Hopes, Fears and Reality Study. While the number of people who worked in retirement declines with age, one in five of those who retired 10-15 years ago say they continue to work.
Your LGBTQ and other clients may not be able to take advantage of every strategy but even relying on a few can help increase their savings over the long run and may help them live more comfortably in retirement.
So if you have LGBTQ clients, they may be in need of a financial makeover, or at least some retirement savings and financial management counseling. Work closely with your financial services firm and give your LGBTQ clients the retirement eye.
E. Thomas Foster Jr. is head of strategic relationships for retirement plans for Massachusetts Mutual Life Insurance Co. (MassMutual).