Late retirement plan have caused many people great worries and panic when it seems they have not been able to put enough money away for their old age.
Background to late retirement plan
Do not be amazed that you are not the only one wondering if late retirement plan can be a success. It is on record that an average American has saved only about $6,000 towards retirement. Puzzling isn’t it? well I can’t definitely say about you but six thousand dollars won’t get me anywhere in my old age!
When to start
Let’s say you are gradually moving towards your retirement age, and then you should not be contended with an average savings. Like the saying goes, it is better late than never, there is time.
Firstly, if you have not saved any money yet, there is still time now, start saving anyhow and everywhere. No amount is too small. Even if you are not able to save a million dollars, anything you tuck away now will leave you in a better position than nothing.
Late Retirement plan
Let us say you are 50 now and you want to save towards retirement, you thinking, it is too late? Not really.
If you put in an average rate of your income (8%) for 15 years by 65 years you would have amassed over $300,000 -$400,000 depending on your average income. This is not bad for someone who got into the game late. Let us say you defer till 70 before you retire you will have close to $500,000.
Benefits of Personal Retirement Account
1. One benefit is that there is no restriction on the amount of money you can put into the account. It is pay as you like.
2. In case of emergency, you can easily have access to such much, since there are no penalties for early withdrawal.
3. This type of accounts are funded with after-tax income, therefore you can access your fund with the idea of avoiding creating tax liabilities.
Also, you can use the small income you have to gather assets for you, will be useful in your old age. It is good to have cash but it is better when you have a cash generating asset or business. There are various types of asset that you can acquire to give you these, they include but not limited to:
1. Houses and land
2. Delivery vans
4. Inns, cafés and tea shops
In conclusion, an individual should try delaying retiring till 70 if his or her health permits. Late retirement planners commonly used this techniques to increase their savings. We still have able bodied people at 70 and 80 who are capable of doing things even youths cannot do. If you fall into this category, push it farther.