Retiring Without a Pension

Many modern careers no longer offer employees the option of a matched 401k, let alone a full pension. While some state and government workers are fortunate to have pensions waiting for them at retirement, there are a growing number of the American workforce who don’t have any form of financial security available to them at retirement. Without employer contributions, retiring at any age can seem like an unattainable task. Luckily, there are strategies that anyone can take to build a retirement on their own. Read ahead to learn some of the best options for saving for retirement without help from an employer.

What’s a Reasonable Retirement Age?

As you approach retirement, consider how long you hope to work, and what age will be reasonable for retirement. While some expect to enter full retirement in their 50’s, this isn’t attainable or desirable for everyone. Think realistically about how long you can physically continue to work, how long you may need to work to build a retirement, and use those two numbers to find your ideal retirement age. Another aspect to consider is whether you want to taper off your work; going from full-time to part-time work and continuing to have an income without working 40 hours a week is an option.

Pay off Debt

If you have debt of any kind, be it a mortgage, credit card debt or student loan debt, pay it off as quickly as possible. Compounding interest can accumulate and leave you with considerably less money to save than you would have otherwise. Once you get rid of any lingering debt, your monthly payments can be then put into a savings plan instead, and you’ll get ahead of the game.

Start an IRA

IRAs are excellent ways to begin saving money for retirement, but they work best in conjunction with other savings plans because they have a limit on yearly contributions. Both Roth and traditional IRAs let savers under 50 contribute $5,500 a year, while those over 50 can give $6,500. Money that goes into traditional IRAs are done pre-tax and are tax deductible. However, they are taxed at the time of withdrawal, while Roth IRAs are contributed to after taxes and have no fee when withdrawn at retirement. Both have their own benefits, check with a financial planner to determine the best option for your retirement.

Speak with a Financial Planner

Each of the options included above are excellent starting points for retiring without employer-sponsored retirement, but they all work better when combined with other savings strategies. The best way to take advantage of these is to speak with a financial planner. A financial planner can take an un-biased and objective look at your finances and help you determine the best approach for maximizing the amount of money you can reasonably save for retirement. A financial planner from Retirement Income Strategies can get future retirees started with small steps toward retirement or more aggressive saving tactics if that’s a financial reality for the saver. Contact us to speak with one of our knowledgeable financial planners today.