Retiring comfortably is within your reach, no matter your age. It's never too late to start saving and investing for your future, and there are plenty of examples of people who have done just that.
The difficult part is understanding how to get started.
That’s what the Retirement Playbook is for.
This is a 3 Step Process for boosting your retirement savings. It’s laid out in an easy to read format so you can get started as early as today.
It doesn’t matter if you have years left until you retire, or if you’re already in retirement, 90% of these strategies will likely apply to you.
There has never been a better time to save for retirement.
Never before have we been able to build investment portfolios like we can today… or start side businesses without any upfront investment… or tap into previously hidden knowledge regarding Social Security Benefits.
The Retirement Playbook covers all of this and more.
You’ll see retiring wealthy is not just a pipe dream – it's a very achievable goal if you're willing to put in the work. So start saving, start investing, and start building your wealth today. I promise you won't regret it.
Step 1: Max Out Your SS Benefits
Boost Your Benefits By 132%
If you are nearing retirement age and wondering when to start claiming your Social Security benefits, the answer is simple: the longer you wait, the more money you'll receive.
You can start claiming your benefits as early as age 62, but if you do, you'll receive a reduced benefit for the rest of your life. The reduction is substantial – up to 30% less than your full benefit, according to the Social Security Administration.
On the other hand, if you wait until your full retirement age, you're entitled to your full benefit. The full retirement age varies based on the year you were born, but it's typically between age 66 and 67. Waiting until your full retirement age means you'll receive the maximum benefit that you're entitled to.
But if you're able to hold off even longer, until age 70, you'll receive an even higher benefit – up to 132% of your full benefit, according to the Social Security Administration.
That's because for each year that you delay taking your benefits beyond your full retirement age, your benefit will increase by a certain percentage, known as delayed retirement credits.
So, the longer you wait to take Social Security, the more money you'll receive. And the difference can be significant – waiting until age 70 can result in a benefit that's up to 76% higher than if you started taking it at age 62, according to a study by the National Bureau of Economic Research.
So, if you're able to delay taking your benefits, it can be a smart financial move that pays off in the long run.
Add Over $10,000 To Your SS Benefits Each Year
Another way to boost your Social Security income is by meeting the income requirement set by the Social Security Administration (SSA).
The SSA calculates your benefit based on your average indexed monthly earnings (AIME) over your top 35 years of inflation-adjusted earnings. To qualify for the maximum potential benefit, you need to be in the top income bracket for the entire calculation period. For 2022, this means having inflation-adjusted annual earnings of at least $147,000 over the calculation period.
While hitting the top income bracket for Social Security calculation is a tall order, it's worth noting that those who do manage to achieve it can see a significant increase in their monthly benefit. For example, someone who earned the maximum taxable income for the past 35 years could potentially receive a monthly benefit of around $3,900 in 2022, compared to the maximum benefit of $3,011 for someone who earned the average wage over their career. That's an extra $889 per month, or over $10,000 per year, in Social Security income. So, if you're able to meet the income requirement, it's definitely worth considering as a way to boost your retirement income.
It's important to note that meeting the income requirement for Social Security is just one factor in determining your benefit. Other factors, such as your age at the time you start claiming benefits, can also have an impact. But if you're able to meet the income requirement, you can potentially see a significant increase in your monthly benefit. So, consider ways to boost your income and aim for that top income bracket – it could pay off in the long run.
Eliminate or Reduce Federal Taxes On Your Benefits
Investing in a Roth IRA is a smart move to reduce or even eliminate federal taxes on your Social Security benefits.
With a Roth IRA, you contribute after-tax dollars, meaning you don't get an immediate tax deduction like you would with a traditional IRA or 401(k). However, the money in a Roth IRA grows tax-free, and qualified withdrawals in retirement are also tax-free. This can be particularly advantageous if you expect to be in a higher tax bracket in retirement than you are now.
By investing in a Roth IRA, you can also potentially reduce your combined income, which can help lower your taxes. For example, if most of your retirement income comes from a Roth IRA, your taxable income will be lower compared to someone who is relying on traditional IRA or 401(k) withdrawals for retirement income. This is because Roth IRA withdrawals aren't included in your adjusted gross income (AGI), which is used to calculate your tax bracket and determine whether your Social Security benefits are subject to federal income taxes.
In fact, according to a study by the Investment Company Institute, just 9% of households owning traditional IRAs also owned Roth IRAs in 2019. This means many retirees may be missing out on the potential tax benefits of a Roth IRA. However, it's worth noting that Roth IRAs have income limits for contributions, so not everyone may be eligible to contribute.
In summary, if you want to reduce or eliminate federal taxes on your Social Security benefits, investing in a Roth IRA can be a smart move. With tax-free growth and withdrawals, a Roth IRA can potentially lower your combined income and tax bill in retirement. Consider speaking with a financial advisor to see if a Roth IRA is right for you.
Warning: This Could Reduce Your Social Security By 35%
If you're claiming Social Security benefits early based on your spouse's work record, it's important to know that your benefit will be reduced by a significant amount.
Under current rules, if you claim Social Security benefits at your earliest opportunity (age 62), your benefit will be reduced by 30% compared to what you would receive if you waited until your full retirement age.
However, if you're claiming benefits based on your spouse's work record, the reduction is even greater. In this case, your benefit will be reduced by 25% to 35%, depending on your age.
For example, let's say your spouse is the higher earner and you're eligible for a spousal benefit based on their work record. If you claim that benefit at age 62, your benefit will be reduced by 30%. However, if your spouse hasn't yet claimed their own benefit and you choose to claim both benefits at the same time, your spousal benefit will be reduced by an additional 25% to 35%, depending on your age.
According to the Social Security Administration, nearly 3.8 million people were receiving spousal benefits as of December 2020. Of those, more than 2.7 million were aged 62 or older. This means that a significant number of retirees may be subject to the reduced benefits for claiming early under a spouse's work record.
While claiming benefits early under a spouse's work record may make sense for some couples, it's important to understand the potential reduction in benefits. Consider speaking with a financial advisor or using a Social Security benefits calculator to determine the best claiming strategy for your specific situation. Waiting until your full retirement age or beyond can result in a higher benefit amount, which can make a big difference in your retirement income.
Step 2: Boost Your Savings with these Strategies
Do This To Increase Your Retirement Nest Egg Today
Living a frugal lifestyle can be an effective way to save money and reduce your expenses, which can help you retire earlier. By being mindful of your spending habits and making intentional choices, you can stretch your money further and potentially reach your retirement goals sooner.
According to a survey conducted by Bankrate, nearly two-thirds of Americans say they would struggle to cover an unexpected expense of $1,000. By living frugally and cutting unnecessary expenses, you can build up an emergency fund and gain financial security. This can also help you avoid taking on debt or dipping into your retirement savings to cover unexpected costs.
One way to adopt a frugal lifestyle is to focus on reducing your monthly expenses. This can include things like cutting back on eating out, using coupons or shopping sales for groceries, and finding ways to reduce your utility bills. Additionally, consider downsizing your home or living in a more affordable area to reduce your housing costs.
Adopting a minimalist lifestyle can also help you simplify your life, reduce your expenses, and focus on what truly matters to you. By decluttering your home and belongings, you can free up physical and mental space and reduce the temptation to buy more things you don't need.
According to a survey by The Minimalists, more than 90% of respondents said that simplifying their lives brought them more happiness, and 75% said it reduced their stress levels. By focusing on experiences and relationships rather than material possessions, you can lead a more fulfilling life while also saving money for your retirement goals.
Living a frugal and minimalist lifestyle can be an effective way to save money and reduce your expenses, ultimately helping you retire earlier. By being intentional with your spending and focusing on what truly matters, you can achieve financial security and peace of mind.
Cut Your Expenses By 50% Or More
Geographic arbitrage is a strategy that can help you stretch your retirement savings further by taking advantage of differences in the cost of living between different areas. By moving to an area with a lower cost of living, you can potentially reduce your expenses and make your retirement savings go further.
According to data from the Bureau of Economic Analysis, the cost of living can vary widely between different regions of the United States. For example, the cost of living in San Francisco is more than twice as high as in the city of Atlanta. By moving to a city or town with a lower cost of living, you can potentially save thousands of dollars each year on expenses like housing, food, and healthcare.
In addition to saving money on living expenses, geographic arbitrage can also offer other benefits. For example, you may be able to enjoy a more relaxed pace of life, spend more time outdoors, or take advantage of local attractions and amenities.
It's important to do your research and carefully consider the pros and cons of moving to a new area. Additionally, be sure to factor in the costs of moving and adjusting to a new community.
Overall, geographic arbitrage can be an effective strategy for stretching your retirement savings further and enjoying a higher quality of life. By taking advantage of differences in the cost of living between different areas, you can potentially reduce your expenses and make your retirement goals more achievable.
Here are the 10 lowest cost of living areas in the U.S. according to Rocket Mortgage:
1. Fort Wayne, Indiana
- Average household income: $51,464
- Owner-occupied median home value: $121,600
2. South Bend, Indiana
- Average household income: $42,657
- Owner-occupied median home value: $88,600
3. Dayton, Ohio
- Average household income: $34,457
- Owner-occupied median home value: $69,400
4. Toledo, Ohio
- Average household income: $39,155
- Owner-occupied median home value: $83,600
5. Akron, Ohio
- Average household income: $40,281
- Owner-occupied median home value: $83,500
6. Erie City, Pennsylvania
- Average household income: $38,655
- Owner-occupied median home value: $90,500
7. Knoxville, Tennessee
- Average household income: $41,598
- Owner-occupied median home value: $142,700
8. Memphis, Tennessee
- Average household income: $41,864
- Owner-occupied median home value: $107,100
9. Joplin, Missouri
- Average household income: $45,091
- Owner-occupied median home value: $125,400
10. Harlingen, Texas
- Average household income: $43,003
- Owner-occupied median home value: $92,000
Add $1,500 or More Every Month To Your Retirement Savings
Starting a side hustle or freelance work can be a great way to generate additional income and speed up your retirement timeline.
In fact, according to a recent survey by Bankrate, nearly half of all working Americans have a side hustle, with many using the additional income to pay down debt, save for retirement, or achieve other financial goals.
There are countless ways to start a side hustle, from selling handmade goods online to offering consulting services in your area of expertise. The key is to find something that you enjoy and that aligns with your skills and interests.
By starting a side hustle, you can potentially generate additional income that can be used to boost your retirement savings or pay down debt. According to a study by the National Bureau of Economic Research, each additional year of self-employment can lead to an increase in retirement savings of up to 5%. Additionally, having multiple income streams can provide a valuable safety net in case of unexpected job loss or other financial setbacks.
In addition to the financial benefits, starting a side hustle can also provide a sense of fulfillment and purpose. By pursuing a passion project or using your skills to help others, you may find a renewed sense of energy and motivation that can carry over into other areas of your life.
Of course, starting a side hustle does require some effort and dedication. You'll need to be willing to put in the time and effort to build your business, market your services, and manage your finances. However, with the right mindset and approach, a side hustle can be a powerful tool for achieving your financial goals and speeding up your retirement timeline.
Here are some side hustles you could start today:
1. Catering Business
2. Become a Consultant
3. Start a Home-Based Business
4. Teach Classes Online
5. Transcription or Translation Work
6. Be an online mock juror
7. Review books
8. Sell stock photos
9. Pet Sitting
10. Graphic Design
Reduce One of Your Biggest Retirement Costs Starting Today
Taking care of your physical and mental health can have a significant impact on your finances in retirement. Healthcare costs can be a major expense for retirees, and maintaining good health can help reduce those costs.
According to a study by Fidelity, a 65-year-old couple retiring in 2021 can expect to spend an average of $300,000 on healthcare expenses throughout retirement.
However, the good news is that living a healthy lifestyle can help reduce your risk of chronic diseases, which can lead to lower healthcare costs in retirement. For example, a study published in the Journal of the American Medical Association found that healthy lifestyle habits, such as regular exercise, a healthy diet, not smoking, and moderate alcohol consumption, were associated with a lower risk of developing chronic diseases like diabetes, heart disease, and cancer.
Additionally, prioritizing your mental health can also have financial benefits in retirement. According to a study by the National Bureau of Economic Research, retirees who reported being happy and content in retirement had lower healthcare costs and were more likely to engage in healthy behaviors like exercising and eating well. This highlights the importance of taking care of your mental health and finding ways to reduce stress in retirement.
In summary, prioritizing your physical and mental health can help you reduce healthcare costs and increase your quality of life in retirement. By living a healthy lifestyle and taking care of yourself, you can potentially save thousands of dollars in expenses and enjoy a happier, more fulfilling retirement.
Step 3: Invest Today For a Better Tomorrow
Investing is crucial for anyone looking to retire, as it provides a way to grow your savings and build a larger nest egg for your golden years. According to a report by Fidelity Investments, the average 401(k) balance was $123,900 at the end of 2020, with an average contribution rate of 8.9% from employees.
While this may seem like a substantial amount, it may not be enough to sustain someone through a long retirement. Investing in a diverse range of assets, such as stocks, bonds, and mutual funds, can help increase your savings potential and provide a better chance of achieving your retirement goals.
On the other hand, individuals who do not invest or have limited investment options may struggle in retirement. The National Institute on Retirement Security says the median retirement account balance for working-age households is just $3,000, while the median retirement savings for households nearing retirement is only $17,000. This leaves many Americans at risk of running out of money during their retirement years. Investing early and often can help prevent this scenario by allowing your money to grow over time and potentially generate additional income through dividends or capital gains.
Furthermore, investing can also help combat the effects of inflation, which can erode the value of your savings over time. Historically, the stock market has outperformed inflation, providing an average annual return of around 10% over the long term. By investing in stocks or stock-based funds, you have the potential to earn higher returns than other investment options, such as bonds or savings accounts, which may not keep up with inflation. This can help ensure that your savings maintain their purchasing power and provide for your needs throughout your retirement.
A Dividend Stock Paying a 12% Yield
Star Bulk Carriers (SBLK) is a leading global shipping company that operates a fleet of more than 120 vessels.
With a focus on eco-friendly shipping solutions, the company is well-positioned to capitalize on the growing demand for sustainable transportation. Star Bulk has a strong track record of financial performance, with free cash flow growing from $98 million in 2020, to $744 million in 2022.
Secondly, Star Bulk Carriers is benefitting from the strong global demand for dry bulk shipping. According to a report by Allied Market Research, the global dry bulk shipping market is expected to grow at a CAGR of 4.7% from 2020 to 2027. This growth is driven by the increasing demand for raw materials such as coal, iron ore, and grain, which are typically transported via dry bulk vessels. As a leading player in this market, Star Bulk is well-positioned to benefit from this trend.
Finally, Star Bulk Carriers is committed to returning value to its shareholders through dividends and share buybacks. It currently pays a dividend yield of around 12% and is an attractive investment for income-seeking investors.
The company has a solid balance sheet with a low debt-to-equity ratio, which provides a level of financial stability for investors. For all of these reasons, Star Bulk Carriers is a potentially strong investment option for someone saving for retirement.
Earn a 6% Yield with this Reliable Business
AT&T (T) is a strong investment for those saving up for retirement due to a number of reasons.
First and foremost, the company offers an attractive dividend yield of around 6%, which is well above the average yield for the S&P 500. This makes it an appealing option for income investors who are looking for stable returns over the long-term.
Additionally, AT&T has a solid track record of increasing its dividend over time, which is another positive sign for investors.
Beyond its dividend yield, AT&T is also a key player in the development of 5G technology. The company has invested heavily in this space, and has been working to expand its 5G network across the US. This is an important area of growth for the company, as 5G is expected to have a major impact on a wide range of industries, from healthcare to autonomous vehicles. As such, AT&T's 5G efforts should help drive revenue growth for years to come.
Another factor that makes AT&T a strong investment is its diversified business model. In addition to its telecommunications business, the company also operates a media and entertainment division, which includes HBO, CNN, and Warner Bros.
This diversification helps to insulate the company from risks associated with any single industry or market, and allows it to capture a broader range of revenue streams. Overall, with a solid dividend yield, a commitment to 5G technology, and a diversified business model, AT&T is a compelling investment opportunity for those looking for long-term growth and stability.
This Investment Is Legally Required To Pay Out 90% Of Earnings Every Year
Real Estate Investment Trusts (REITs) are a popular investment option for income investors. REITs are companies that own and operate income-generating real estate properties, such as shopping centers, apartments, and office buildings. These companies are required by law to pay out at least 90% of their taxable income to shareholders in the form of dividends, which can provide a reliable source of income for investors.
One of the benefits of investing in REITs is their relatively stable returns. As long as the underlying real estate properties are well-managed and occupied by tenants, the income generated by those properties can provide a consistent stream of dividends for investors. Additionally, REITs can provide diversification benefits, as they offer exposure to a wide range of real estate properties across different sectors and geographic locations.
Investing in REITs can also provide exposure to real estate without the need for direct property ownership or management. This can be particularly appealing for investors who are looking to avoid the hassle and expense of being a landlord. Instead, investors can simply buy shares of a REIT and receive a portion of the income generated by the underlying properties. However, it's important to note that REITs can be sensitive to changes in interest rates and the broader economy, so investors should carefully consider their investment objectives and risk tolerance before investing.
Our top REIT recommendation is EPR Properties (EPR), which currently pays a yield of around 9%.
EPR Properties is a specialized REIT that owns and operates properties in three primary segments: entertainment, recreation, and education. The company's properties include megaplex theaters, entertainment retail centers, ski parks, and charter schools, among others. EPR Properties is unique in that it is the only REIT that focuses on these types of properties.
This REIT has a strong track record of generating steady income and growth for investors. EPR Properties has consistently increased its dividend payout over the years, demonstrating its commitment to rewarding its shareholders. The company's management team has a proven track record of identifying and acquiring attractive properties that generate stable cash flows over the long term.
Because EPR Properties is required by law to pay out 90% of its earnings in the form of dividends to its shareholders, this ensures investors receive a significant portion of the company's earnings as income.
This characteristic makes EPR Properties a compelling investment option for those looking for steady income streams from their investment portfolios. EPR Properties is a great investment for income investors seeking high dividend yields and long-term growth.
Now Get Going…
Now that you have an arsenal of ideas for boosting your retirement savings, it’s time to put them into action!
You can implement one or more of the ideas above as early as today. So don’t delay, get started now.
Good luck with your retirement journey!
– ProfitableNews.com Staff