5 Steps to Enhance Lifetime Income
So here are five essential steps to take within 15 years of retirement to enhance your lifetime income sufficiency:
1. Track your expenses now. You should begin to track your living expenses and gradually adjust your budget to smooth out your consumption between your living requirements now and your requirements in retirement.
2. Start living like a retiree now. Taking it a step further, you could take the approach of changing your lifestyle now to reflect how you expect to live in retirement. That might mean downsizing your home now, reducing your leisure travel, driving more efficient cars and generally adopting a more frugal mindset.
3. Increase your savings. Any combination of the first two steps should generate a steady increase in excess cash flow which should be saved for retirement. Pre-retirees within 15 years of retirement ought to aim to contribute to their retirement fund a minimum of 15% of their earnings annually.
4. Start exploring your Social Security options. Retirees who are able to postpone their Social Security benefits until age 70 can significantly boost their lifetime income because Social Security increases the size of the benefits each year you delay claiming up to that age. Additional Social Security planning for spousal benefits could increase your Social Security income even further.