Should Working Longer Be Your Backup Plan if You Don’t Manage to Build Retirement Savings?

You’ll often hear that it’s important to save diligently for retirement because Social Security won’t provide enough income for a comfortable lifestyle. But building a nest egg can be easier said than done.

You might have the best of intentions when it comes to saving for your future. But life’s many bills have a tendency to get in the way of such plans.

If you’re well into your career and have realized you’re not making much progress on the retirement savings front, then you may be resigned to the idea of having to work longer. And you may even be fully OK with it, especially if you happen to like your job and career. But is that really such a solid backup plan?

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You can’t make assumptions

You might assume that if your retirement savings efforts don’t pan out, you’ll just compensate by working longer. But that may not end up being possible.

It’s not uncommon for health issues to arise as people age. And if that happens to you, and it interferes with your ability to hold down a job, then you may not have the option to work as long as you want to.

You also can’t assume that your job will be available to you as long as you want it be. It’s not uncommon for older workers to be pushed out of their jobs, and if you happen to get downsized out of yours, finding work elsewhere could prove difficult later in life.

That’s why it’s so important to steadily find a retirement savings plan through the years. That way, if working longer doesn’t pan out, you won’t be out of luck financially.

Putting the process on autopilot could help

A big reason so many people struggle to fund their retirement plans is that their money tends to disappear on them when unplanned bills and impulse buys creep up. That’s why it’s a good idea to automate your retirement savings. If you move money over for savings purposes before you get a chance to spend it, you’ll have an easier time staying on track.

Now 401(k) plans, by nature, are designed to make the savings process automatic, since contributions are deducted from your paychecks. But many IRAs offer an automatic savings option, too, so it pays to sign up if that’s a feature of your plan.

Don’t let yourself fall short

The average senior on Social Security today collects about $22,000 a year. That’s probably not the sort of income you want to be limited to in retirement.

But you also can’t assume you’ll have the option to keep working if you feel you need to do so to make up for a lack of savings. So instead, put your savings on autopilot and do your best to carve out money for your IRA or 401(k) on a monthly basis.

You may need to start with a smaller monthly contribution, like $50 or $100, and work your way up from there over time. The key is to get into the habit of saving for retirement consistently, and then build on that as your income increases over time.

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