Inflation is super stressful, and not only because of the higher costs now but also because of what it means for our futures. It’s a huge concern for retirement savers because a rising cost of living means they’ll need a larger nest egg to cover all their expenses. And some are struggling to set aside anything for retirement as it is.
Saving more for retirement often means diverting a larger percentage of your income to retirement savings, but this can be a challenge for most people, especially with record inflation. Fortunately, there’s another way to boost your savings without taxing your budget further today – but it comes at a cost.
How to save more and slash your retirement expenses
Delaying retirement helps you save more by giving you additional time to save. You can continue to live off your paychecks and set a portion aside for retirement. In the meantime, the money you’ve already invested for retirement will continue to grow. You might experience some losses, especially amid recessions, but if you leave your retirement savings alone, there’s a good chance it will rebound when the market recovers.
Alternative ways to get the money you need
Delaying retirement won’t appeal to everyone, and for some it isn’t always feasible. If you become unable to work, lose your job, or have to take care of a sick family member, you may not be able to delay retirement even if you want to. There are some other options, but they may not work quite as well in all cases.
First, you could transition slowly into retirement. Rather than quitting the workforce all at once, you could gradually reduce your hours a little at a time until you’re fully retired. This way, you don’t have to drain your retirement savings as quickly. Not all employers will allow this, though. If yours doesn’t, you might have to choose a different strategy or consider a different job as you transition into retirement.
You could also build your nest egg faster by starting a side hustle, negotiating a raise at your existing job, or switching employers if you find a better offer elsewhere.
You can also use a combination of these strategies if you prefer. The important thing is to come up with a plan that you believe will give you the money you need for retirement. If you’re worried your savings are going to run out, it’s best not to retire just yet.