Now all of these costs are healthcare- and health-related. But think about the other expenses you’ll encounter as a senior, from housing to transportation to food.
And let’s not forget entertainment. Once you stop working, you’ll need a way to stay occupied. That could mean having to spend money to maintain your sanity and avoid excessive boredom.
All told, it’s easy to see why you may end up needing a larger retirement nest egg than anticipated — and why socking away a mere 10% of your income may not cut it. And so if you’ve been underfunding your IRA or 401(k) plan thus far, it’s time to rework your budget and find ways to carve out more money to put into your savings.
That could mean trimming some basic expenses. You’d be surprised at how a few modest changes could mean getting to put hundreds or even thousands more into your retirement plan each year. Or, it could mean picking up a side job and using your earnings to pad your savings.
It’s not just about saving more
Of course, saving more is only part of the equation. To really grow your savings, you’ll also need to invest aggressively — namely, by loading up on stocks while retirement is still many years away. If you play it too safe with your IRA or 401(k), you’ll risk stunting your savings’ growth.
