Saving enough for retirement is a source of concern in good times, and I think most of us can agree, we’re not living through good times right now. 2020 has brought numerous challenges, the most significant being the COVID-19 pandemic. Its effects are both immediate and far-reaching. Some of the unemployed are raiding their retirement savings, and new contributions are out of the question for the foreseeable future.
Americans are already recognizing the effect that the pandemic is going to have on their ability to retire. A recent TD Ameritrade survey highlighted five strategies workers are now considering to cut costs in retirement so they can afford to live comfortably on less money. I explain each of them in detail below.
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1. Working in retirement
About half of those surveyed said they would consider working in retirement. The survey didn’t ask about how much they would work, but it’s possible that many would choose to work part time so they could still enjoy some more freedom. Gen Xers and baby boomers were more likely to consider this strategy than millennials, but all groups considered this their top option to make ends meet.
A job can provide a steady source of income in retirement while reducing how much money you must withdraw from your savings. All of this assumes, of course, that you’ll be able to keep working in retirement, and that is the big if. If you become sick, injured, or you must care for a relative, you might not be able to work even if you’d like to, so you’ll need a backup plan.
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