6 Steps to a Great Retirement
Think you can get by on just Social Security when you retire?
Fact: The average monthly Social Security check is $1,420.
Can you live on that? I sure can’t.
However, millions of retired Americans are squeezing by with little more than a Social Security check. A heartbreaking 66% of retirees rely on Social Security as their primary source of income in retirement.
That’s why this week I’ll cover six steps people in their 60s need to follow to ensure they don’t become one of the statistics above.
Step 1: Continue to Max Your 401(k): That not only includes the IRS maximum of $19,000, but also the extra $6,000 in “catch up” provisions allotted for people 50 years or older. If you aren’t putting in $25,000 ($19,000 + $6,000 catch-up) you’re in trouble.
And don’t tell me you can’t do it. Stop going out for lunch, stop buying $4 cups of coffee, sell one of your cars or move into a smaller, cheaper house.
Step 2: Pay off Your Mortgage ASAP. Speaking of your home, the odds are high you’re living in more home than you need.
Sure, big fancy homes are nice. But a smaller one with a smaller mortgage will be easier to pay off. Smaller homes have lower insurance and property tax. Smaller homes cost less to heat and cool. Smaller homes are cheaper to maintain.
Step 3: Keep Your Kids 0ut of Your Wallet/Purse: You must tell your kids the Bank of Dad/Mom is closed. Look, retirement is staring you in the face and the last thing you should do is sacrifice your security to help your children buy a house they can’t afford or start a business that could fail.
Step 4: Learn the Social Security Rules. You can start collecting a Social Security check when you turn 62, but that’s a big mistake if you can still work.
If you start taking Social Security before your full retirement age (FRA) you will lose as much as 30% of your benefit. Better yet, for every year you wait, your Social Security check will increase by roughly 8% a year up to age 70. If you can afford to wait, do NOT take Social Security at 62.
Step 5: Learn the Medicare Rules. Medicare isn’t simple, which makes it even more important you don’t screw up one of the most important retirement decisions you’re going to make.
Unless you are disabled, you are eligible to enroll in Medicare at age 65, but there are only certain times that you can enroll in Medicare. These are:
- The 3 months before the month you turn 65
- The month you turn 65
- The 3 months after the month you turn 65.
If you don’t enroll during the above time frames, you will get hit with a late enrollment penalty AND pay a higher monthly Medicare premium for the rest of your life!
Step 6: Don’t Get Conservative With Your Portfolio: Odds are you’re going to spend 20-plus years in retirement, which means your money still needs to grow to combat the ravages of inflation.
That doesn’t mean you should invest in risky stocks like Uber, Snapchat or Facebook. But it does mean you should invest in mature, established dividend stocks.
That is exactly what I recommend in my Infinite Income service, and it is the ideal investment companion for anybody in their 40s, 50s and especially 60s.
Here’s to growing your wealth,
Chief Income Expert, Mike Burnick’s Wealth Watch