When it comes to retirement, a simple plan can save you hundreds of dollars a month
What to know about retirement and how to maximize your benefits.
article With more than a quarter of the U.S. population aged 65 or older, more than 1.5 million Americans will retire this year, according to the U-M Center for Retirement Research.
If you’re one of them, it’s possible you’re spending more than your income, according, in part, to a new study from the University of Michigan’s Institute for the Study of Aging.
The report, titled The Retirement Gamble: Retirement Spending and the Costs of Living, found that retirees with incomes of $60,000 or more are spending more money on health, housing, food and other expenses than those with incomes less than $50,000.
That’s a gap of about $6,200 a year for people who are in the middle, or median, income bracket.
In other words, those with a median income of $45,000 will spend more than $6.6 million a year, on average, to save for their retirement.
For example, people earning $60 a year or less will save $3,400 more than those earning $80 a year.
And those earning more than the median spend an additional $2,800 a year on health care, according the report.
So what can you do to maximize retirement savings?
If you have to leave the workforce to be financially independent, it might be better to stick to a simple retirement plan with few exceptions.
While a plan that includes both Social Security and Medicare can offer the best bang for your buck, many people simply aren’t prepared for the kind of cost savings that are achievable with retirement savings plans.
That includes those with an income below the poverty line, which means that many people with high-cost-of-living situations, such as working multiple jobs or caring for sick family members, are struggling to save money for their retirements.
The U-m study also found that people in higher-income households, such the ones who are retired, are saving more than other Americans.
For instance, people in households earning between $50 and $100,000 a year have a savings rate of 10.5 percent, compared to 6.5 for people earning less than that.
And while they are spending less on health and other items, the study found that the median U-Mill employee spent $12,000 more on health expenses each year than the average U-mill employee, on an average of $8,800.
The average savings for U-Ms employees is about $14,600.
However, even those who are wealthy can benefit from a simple and cost-effective retirement plan.
Retirement savings are an excellent way to save on your health care costs and to help pay off your debt when you retire, according David Stacey, the chief financial officer of U-Met.
You’ll save on the cost of your health insurance, so you can focus on your retirement goals and live more comfortably in the years ahead.
And the cost-savings you’ll experience will be more than offset by the cost savings you’ll earn by staying in the workforce.
So if you want to save more money and make sure you’re on track for a retirement of health and well-being, start planning now, said Stacey.
More education on retirement: Learn more about how your retirement can be more affordable, including the impact of the Affordable Care Act on your plan.
The study also highlights that it’s not always easy to determine the right type of retirement plan, and the best one for you may be different from what you might have imagined.
The first step is to learn more about your retirement savings.
For more information on how to plan, visit the Um Retirement website.
The full report is available on the UM website.
To read the full study, go to: U-Missouri Study: Retirement Planning: How to Save for Retirement in the Age of Obamacare