This article is written on the topic; I am 50 years old and have no retirement savings. The article discusses the consequences of lacking retirement savings, the best ways to boost them, as well as the cheapest places to retire on social security. You can skip the details and head directly to Top 10 Cities for 50-Year Old People With No Retirement Savings.
What Happens If You Have No Retirement Savings?
Millions of Americans are nearing retirement empty-handed, meaning they must curtail their retirement spending dramatically or continue working during their retirement years. The situation is only likely to worsen, considering two-thirds of individuals don’t contribute to a (401) k or a retirement savings account at all. Many need more cash to contribute to such plans, and yet others need access to such workplace retirement plans.
Census researchers Michael Gideon and Joshua Mitchell report that only 79% of Americans are provided with retirement plans through their employers, and merely 41% of workers at such places contribute to these plans. For individuals who think that contributing to these plans is enough, the reality is quite different. One has to ensure they steer clear of these savings until after they have retired. Unfortunately, rising inflation levels have had many individuals dipping into their retirement funds. According to Fidelity, the number of hardship withdrawals increased to 2.4% in 2022, following an 8.5% decade-high level of inflation in the same period.
For those having no retirement savings at 65, social security can be their best bet. However, the average social security check for an individual is around $1,701.62, and the average household run by a 65-year-old can require as much as $4,000. Risks of social security funds depletion by 2033 are only worsening the outlook for retirees, leaving them with fewer options to secure a comfortable retirement. Insider Monkey notes that retiring to states that don’t tax social security can help. In particular, Georgia, Kansas, Mississippi, Alabama, and Arkansas can be good choices, considering they are some of the best states for the cost of living and taxes.
For potential retirees who still have some time, starting to save right away can help them retire despite not having any retirement savings. Many big financial companies can help steer such individuals in the right direction, such as Morgan Stanley (NYSE:MS), The Charles Schwab Corporation (NYSE:SCHW), and Bank of America Corporation (NYSE:BAC). Morgan Stanley (NYSE:MS) is an American multinational investment bank and financial services company helping people, institutions, and governments in raising, managing, and distributing the capital they need to achieve their goals.
The Charles Schwab Corporation (NYSE:SCHW) offers banking, commercial banking, investing, and other financial services to both retail and institutional clients. Moreover, Bank of America Corporation (NYSE:BAC) is an American multinational investment bank and financial services holding company serving individuals, businesses, and large corporations.
Best Ways to Boost Retirement Savings till 65
If you're wondering how to catch up on retirement savings in your 50s, read on below:
Act Now
Merrill Edge, a subsidiary of Bank of America Corporation (NYSE:BAC), recommends that the best action to boost retirement savings is to start saving today. Starting early and letting your assets grow allows individuals to invest less and accumulate more along the way. For instance, a 25-year-old investing only $75 per month is likely to have more assets accumulated than an individual investing $100 at age 35. The bottom line is whether you're 60 years old and have no retirement savings, or merely 25, the best action to take is to start immediately.
Calculate Your Retirement Needs
While Baby Boomers need only $1.25 million to retire comfortably, millennials and Gen-Z will likely require as much as $3 million, accounting for inflation. That said, your retirement needs depend on your annual expenses. Determine how much you need to have for a comfortable retirement so that you can start saving accordingly.
Contribute to Your Retirement Account
Next, understand your retirement account options and start contributing. Your retirement account options largely depend on where and how you work. For-profit employers usually offer a 401(k) account. In such a case, you will be asked to fill out a form stating the percentage of your paycheck you want saved. When done, your employer will save the amount with a company such as Vanguard, Fidelity, or The Charles Schwab Corporation (NYSE:SCHW). If your employer doesn’t offer you a plan, simply use the services of financial service firms like Schwab.
Consider Bonds Over Stocks
According to Morgan Stanley (NYSE:MS), U.S. equities are struggling to break out of a bear market while bond yields have meaningfully increased. Inflation is expected to be around 3.5% by the end of 2023, and U.S. treasuries are reported to yield more than that through the 10-year maturity. This further implies that inflation-adjusted yields could turn positive, and bonds could provide an extra 1.5 to 2.5 percentage points beyond Treasury yields. Moreover, bonds are relatively fair-priced and also offer attractive capital gains.
Take Advantage of Catch-up Contributions
If you are 50 with no retirement savings, it's time to do some catching up. Fortunately, individuals aged 50 or older can go beyond normal contribution limits to retirement accounts with "catch-up contributions." These contributions can significantly boost your retirement savings.
Automate Savings and Control Spending
Additionally, consider making your retirement contributions automatic so that your retirement nest egg continues to grow without you having to remember it. Remember to control your spending along the way, too. This move will help you save or invest more than you currently do.
Find Out the Cheapest Places to Retire on Social Security
Hopefully, now you're on the right track to saving sufficiently for your retirement years. One additional step you can take is to figure out the cheapest places to retire on social security. Doing so will allow you to stretch your retirement savings further and cover additional expenses that may arise.
Image by pasja1000 from Pixabay
Methodology
To compile the list of cheapest places to retire on social security, we listed out the cheapest countries for retirement under $1,781, the average monthly retirement benefit for Security Security recipients. Countries were assesed on their monthly individual costs of living and crime indexes to pick out 10 cheapest countries.
Next, we used Quora, Reddit, and similar forums to pick out cheapest places within each country and rank them based on their costs of living. Selecting two from each country allowed us to get a good mix of options from each of the cheapest countries on our list. Costs of living for a single individual have been taken from sources such as LivingCost.org, International Living, and others. Places were ranked in descending order from the highest to the lowest costs of living.
Here are the 15 cheapest places to retire on social security:
15. Zagreb, Croatia
Cost of Living: $1,300
A vibrant cultural scene, excellent healthcare, and plentiful amenities make Zagreb, Croatia, a popular place for retirees. Even if you are 50 years old and have no retirement savings, your social security will allow you to get through on just $1,300. The city is also home to the UNESCO World Heritage Site, Plitvice Lakes National Park, and other hiking trails, parks, and nature spots.
14. Alicante, Spain
Cost of Living: $1,129
With its stunning beaches like Playa del Postiguet, affordable cost of living, and reputable healthcare services, Alicante emerges as an enticing choice for retirees seeking a nice place to call home. The city offers its residents a Mediterranean climate, good food, great wine, and an amazing quality of life.
13. Bucharest, Romania
Cost of Living: $1,122
Picturesque scenery, great amenities, and a high quality of life make Bucharest, Romania, a top choice for retirees. Living in the city costs only about $1,122, enough to comfortably retire on social security. The city offers a vibrant lifestyle to retirees, with various festivals, concerts, and social events happening throughout the year.
12. Boquete, Panama
Cost of Living: $1,100
Retirees love Boquete, Panama, for its vibrant culture, temperate climate, and affordable living. The rainforest-style weather makes it particularly charming, and the beautiful flora and fauna, lush mountains, and green landscapes add to it. There is a growing expat community, healthcare is top-notch, and the area is also safe and secure for retirees.
11. Granada, Spain
Cost of Living: $1,100
Located on the foothills of the Sierra Nevada Mountains, Granada gives retirees the chance to enjoy the perks of a charming old town, hopping from one outdoor activity to another. Explore sandstone caves in Guadix, a canyon in the Rio Verde system, or hike through the waterfalls at Los Cahorros because retirees love to live outside when in Granada.
Click to continue reading and see Top 10 Cities for 50-Year Old People With No Retirement Savings.
Suggested articles:
20 Worst States to Retire in for Taxes and Cost of Living
25 Best Sports Stadiums in the World
12 Most Luxurious Cruise Lines
Disclosure. None. I am 50 Years Old and Have No Retirement Savings is originally published in Insider Monkey.
