I just read a report saying that an average U.S. citizen who has paid into the social security system can expect to bring in about $1,360 a month, or $16,320 a year.
That’s a pretty slim amount of money, if you have nothing else saved and no pension. A lot of Baby Boomers who did have savings lost a bundle in the Great Recession, and may have eaten up all of their savings just to live on.
Over 55 And (Nearly) Penniless
One over 55 colleague, whose wife was battling breast cancer while he was jobless, spent 3 years looking for work in his field (commercial development) when nothing was being built. He borrowed money from everyone I know, including me, and simply wasn’t able to pay anyone back. Last I heard, he had moved several states away to move in with a grown child.
Still another over 55 colleague sold her California house, collected the meager equity it had remaining after the recession, and bought a small but affordable condo in Florida where the local tax bite wasn’t as severe. Despite her years of experience and expertise, no one was willing to hire a woman of her age. She eventually found a couple of part time jobs doing things she enjoys, but between that and her social security income, it’s not the retirement she had worked for.
Get Rid Of The Ostrich Mentality
Some over 55 friends have been counting on a lottery win or rich uncle to swoop in with retirement dough. Probably not gonna happen, right? I say, get rid of the ostrich and get your head out of the sand. Obviously time is not on your side for saving for retirement at this point, but it’s certainly not impossible if one doesn’t give up. While I recommend making what money you have work harder for you (which is why I like real estate notes), the fact is, there are still things you can do.
First, start maxing out your 401(k) if you have the option to do so. Workers 50 and older can put up to $24,000 into a 401(k) per year, and if you do that for three years, you’ll have $72,000, assuming your savings don’t generate any growth. Better yet, if you have the option to contribute to a 401(k) and are able to max out, consider postponing retirement and working a few extra years to boost your savings while you can. Source: msn.com
Creating Passive Income
If you can’t afford to sock that kind of money away, then it’s time to find another source of income by taking on an Uber job, starting a business, renting out a room in your home or selling stuff you no longer need.
With just $35,000 set aside (that’s $583 saved monthly over 5 years not including interest), you can afford to buy a note or two that will pay you an extra $400 to $600 a month for many years to come. That’s buying yourself some extra income, especially when you will need it.