Planning For Retirement When Savings Fall Short | WAMU 88.5 - American University Radio
Filed Under:

Planning For Retirement When Savings Fall Short

Play associated audio

For most Americans, the math for a comfortable retirement may never add up.

According to recent census figures, Americans ages 55 to 65 had about $45,000 in savings and assets, not including their homes. In another survey, by the Employee Benefit Research Institute, 57 percent of American workers said they have less than $25,000 in total savings and investments. That's not much to supplement Social Security to get them through the rest of their years.

Morning Edition's Renee Montagne talked to three experts about retiring with little savings.

Michelle Singletary, personal finance columnist for The Washington Post, on rethinking expectations

"You've got to just think differently about your retirement if you have no savings," Singletary says.

She suggests downsizing for those who don't own their home outright. For those who can't downsize, she suggests taking on a roommate — or perhaps asking a relative to move in — to help split the rent.

"You've just got to think out of the box and not be so stubborn. People say, 'I can't live with anybody. I can't sell the house,' " she says. "But what's the alternative? For you to sit there and struggle and lose the house anyway? Or stress out your adult children or other relatives while you try to make things work?"

Tim Maurer, financial planner, on moving someplace cheaper and getting a job

Maurer works with clients in the Washington, D.C., area, where houses average $370,000. He often encourages them to look south, to states like North Carolina.

"Take a look at Charlotte, a very diverse city with all sorts of business opportunities as well as pleasure, and here we're talking about a median home price of $126,600, and then you can buy a house for less than half the cost. And if you buy the house that you need at this stage of the game — something a little bit smaller, more comfortable — you can actually have a net gain where you can take the excess funds from selling your house, add it to your retirement nest egg, and now you're also paying less every day for the rest of your life because the cost of living is lower."

Maurer also says a new or part-time job can supplement Social Security income. Downgrading careers doesn't have to be a bad thing.

"I've had clients who spent a lifetime in engineering [who] love getting a job at Home Depot because it was the place they loved to go on Saturdays. They have good benefits there. People are getting jobs at a place like Starbucks. These [are] places that tend to pay reasonably well, certainly below what they may have expected or received over the course of their careers, but it's something that they really, genuinely enjoy doing. And as a result, those job opportunities are out there, because they are not always the highest paying."

Mary Beth Franklin of Investment News, on making the most out of Social Security

"If you plan to keep working while you claim Social Security benefits, you're going to end up losing some of those benefits — basically giving them back. So my No. 1 rule is if you plan to keep working, don't take Social Security benefits before your normal age of 66. Once you get to 66, this thing called the earnings cap that can claw back some benefits goes away."

Copyright 2013 NPR. To see more, visit http://www.npr.org/.

NPR

Rod McKuen, The Cheeseburger To Poetry's Haute Cuisine

Poet Rod McKuen was loved by millions but mocked by literary critics. He died this week at age 81.
NPR

Shake Shack Sizzles With IPO As McDonald's Fizzles

Shares of the burger chain shot up Friday, its first trading day. Shake Shack and other fast-casual joints are taking a bite out of McDonald's, which can't recast itself to fit the current trend.
NPR

What Romney's Retreat Means For GOP Hopefuls

NPR's Scott Simon speaks with senior Washington editor Ron Elving about the narrowing Republican presidential field for 2016 and what we've seen so far in the first month of the new Congress.
NPR

Media Outlets Partner With Snapchat To Appeal To Younger Users

As people disappear from the audiences of conventional news organizations, 11 media outlets have partnered with Snapchat in the U.S. to offer its younger users easily digested fare within the app.

Leave a Comment

Help keep the conversation civil. Please refer to our Terms of Use and Code of Conduct before posting your comments.