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Key ways to stretch your retirement income
Catch-up contributions allow you to invest an additional $6,500 into your 401(k) and an extra $1,000 into your IRA each year.
For each year you postpone collecting social security benefits (from ages 67-70), you’ll receive an additional 8% in your monthly benefit.
Investing in stocks can help provide a buffer against inflation, though it’s best to keep a diverse portfolio including both stocks and fixed-income assets.
Maintaining your physical health can help you live a longer, healthier life and avoid high medical costs.
A long and fulfilling retirement is a dream for many, but a big part of making that a reality is ensuring that you have sufficient savings to last through your golden years. Here are some key ways to stretch your retirement income to help you feel financially secure.
1. Make catch-up contributions
401(k) and IRA savings accounts are the foundation of many retirement plans. You can make annual contributions of up to $19,500 to a 401(k) and $6,000 to your IRA – unless you’re aged 50 or older. Then, you’re eligible to make catch-up contributions and invest an additional $6,500 into your 401(k) and an extra $1,000 into your IRA each year.1 This offers an excellent opportunity to boost your nest egg.
2. Wait to claim social security
Another way to stretch your retirement income: wait to begin collecting your Social Security benefits. If you were born any time after 1960, your full retirement age is 67. You may start collecting your benefits before that; however, the amount you receive will be 30% lower than if you wait.2 For each year you postpone (from ages 67-70), you’ll receive an additional 8% in your monthly benefit. If you’re open to remaining in the workforce, it may be worth holding off collecting in the short term to enjoy larger payouts in the long run.3
3. Invest with inflation in mind
When managing your retirement funds, it’s important to account for inflation. Fortunately, you can buffer yourself against the forces of inflation when picking your investments. Unlike bonds and Certificate of Deposits (CDs), stocks often have a rate of return that’s higher than inflation.4 But they can also be a riskier financial move. Savvy investors understand that they may want to balance their stock options with more stable fixed-income instruments. This can help protect you against market volatility while also allowing you to outpace inflation.5
4. Consider downsizing
Many retirees also save money by downsizing. With children out of the house, you likely won’t need as much space. And smaller homes are simply more cost effective; they typically have lower utility bills, property tax and mortgages (or rent). An added bonus: They’re much easier to maintain. That means you can spend more time relaxing and less time cleaning.6
5. Stay healthy
While it sounds simple, one of the best ways to make the most of your retirement money is to maintain your physical health. Vitality, our innovative life insurance product offering, recognizes this sentiment and rewards customers for the everyday healthy choices they make. Things like going for a walk, eating more fruits and vegetables, meditating and even getting a good night’s sleep.
Attending regular physicals is also critical for preventative care, because early intervention is usually more affordable than treating more advanced illness. Beyond saving you money, staying healthy also means you’ll be able to enjoy your twilight years more fully.7
You deserve the retirement you’ve always dreamed of, filled with the things you love most. With the proper forethought and planning, you can be confident your savings will last.
Financial planning and investment advice provided by John Hancock Personal Financial Services, LLC (“JHPFS”), an SEC registered investment adviser. Investments: not FDIC insured– No Bank Guarantee – May Lose Value. Investing involves risk, including loss of principal, and past performance does not guarantee future results. Diversified portfolios and assetallocation do not guarantee profit or protect against loss. Nothing on this site should be construed to be an offer, solicitation of an offer, or recommendation to buy or sell anysecurity. Before investing, consider your investment objectives and JHPFS’s fees. JHPFS does not provide legal or tax advice and investors should consult with their personal legaland tax advisors prior to purchasing a financial plan or making any investment.
Vitality is the provider of the John Hancock Vitality Program in connection with policies issued by John Hancock. Insurance products are issued by: John Hancock Life InsuranceCompany (U.S.A.), Boston, MA 02116 (not licensed in New York) and John Hancock Life Insurance Company of New York, Valhalla, NY 10595.