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Retire at 70 Maybe not
CHICAGO (10/9/12)--Are you expecting to work an extra five years, say to age 70 instead of 65, so you can afford to retire? According to recent data from the Employee Benefit Research Institute (EBRI), this could be a dicey strategy (Chicago Tribune Sept. 28).

Save more:

  • If you don't have a budget, create one. If you already have a budget, revise it to reflect your serious commitment to saving.
  • Contribute to retirement accounts such as individual retirement accounts (IRAs) and 401(k)s. If you have an employer match, make sure you meet it. Ask your financial adviser for help with asset allocation--it will have a big impact on your long-term returns.
  • Devise a withdrawal strategy. Work with your financial adviser to make sure you withdraw from taxable and tax-deferred accounts in a way that makes your money last as long as possible.
Spend less:

  • Reduce or eliminate any high-interest debt. Prime example: credit card debt.
  • Alter your lifestyle. If today's lifestyle includes expensive vacations far from home, look local for satisfying, affordable getaways.
  • Downsize. Reduce housing costs by moving to a more affordable home and/or community.
Create income:

  • Stay at your job if you are able. Even part-time work will help you meet expenses.
  • Start a small business. Network with seniors to get ideas and support.
  • Take in housemates. Family members may also provide mutually beneficial living arrangements.
  • Find out if a reverse mortgage could benefit you.
Include health-care insurance costs:

  • Procure private health insurance or Medicare. Sign up for Medicare on time to avoid a premium hike.
  • Plan for chronic illness. Investigate the pros and cons of signing up for long-term care insurance.
EBRI's website, Choose to Save, offers a simple, two-page calculator that helps you quickly identify the ballpark amount you need to save to fund a comfortable retirement. If you've already used other calculators, this one provides a new slant on the numbers.

For more retirement information, read "Four Key Steps to 'No Regrets' Retirement" in the Home & Family Finance Resource Center.
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