There’s no shortage of research and studies that tell you people have done little to prepare for retirement. They have not saved enough for retirement. The most recent study I’ve seen says that half of people coming up on retirement (age 55+) don’t have any retirement savings.
Clearly, it’s your responsibility to prepare for retirement and have saved for retirement. But if you’re 55 or 60 years old, the last thing you need is somebody telling you what you should have done. The better question to ask and answer is, "given that I am 55 or 60 years old, what can I do now to retire"?
There are the obvious options to prepare for retirement when coming up on retirement age. Continue working. Maybe, just like the people hundred years ago, you work until you die. Before 1937, there was no Social Security and most every job involved physical labor, usually farming. You simply worked until your body gave out. If that retirement plan was good enough for your great grandfather, maybe it's good enough for you.
I think however the most overlooked option, rather than focusing on income, is to focus on expenses. There may be far less expensive places to live so that your Social Security income might be sufficient to pay all of your expenses.
My mother is a case in point. She did mot prepare for retirement. While she had some savings, $200,000, she lived on the interest from that money plus Social Security. It was a total of $21,000 a year. She also lived in a relatively expensive area but in a retirement community where the housing cost was reasonable. She lived quite modestly, maybe going out to eat once a week and maybe a movie once a month. But she made it work and I never saw her lack anything she desired.
Prepare for Retirement - Most Overlooked Option
Other options include moving to a less-expensive area. This works well if you live on the East Coast or West Coast where costs are relatively high and then you move to Alabama or Louisiana where the cost of housing (and anything influenced by the cost of real estate) is much lower. Since everyone pays less for housing in the area, the plumber charges you less as does the accountant, the hair salon, etc.
You can even reduce your expenses further by leaving the US. You may shudder at the thought of doing so but many thousands of people do so every month. Living in Mexico or Central America has become quite common for retirees as they are able to cut their living expenses by 50 to 70%.
You may have three concerns about living abroad.
First will some rebel commando kidnap you and hold you hostage for ransom from the American government? While that’s possible, you’re probably not that important and it’s unlikely.
Next, you have the issue of healthcare. You don’t have Medicare coverage outside of the US. So you either need to return to the states to use your Medicare benefit or simply use the local health care which is much less expensive. It might also be just as good for most items as we tend to overdo it in the United States and spend far more than necessary.
Last, you may be concerned about language. No need to have that concern. As I travel to different countries, it’s rare that I meet people under age 30 who do not speak decent English. English is truly a global language and if you need to converse in English rather than the local language, just find somebody under age 30 to help you.
The key here is not to be rigid in your thinking. You can prepare for a decent retirement as long as you are flexible about location and lifestyle. Moving to a lower cost area is probably one of the most powerful actions you can take to make your retirement years work financially. You may have plan to live in the same area all of your life but it may be time to think again.