More seniors are single

Around 12 million adults that are 65 years and older live alone, as a 2016 study from the Pew Research Center confirmed. Many of them feel good being single, as they found their freedom.

However, it can be difficult for one person to support an entire household financially. Our tip is to resist the urge to touch your home equity. If your retirement doesn’t look too good, you shouldn’t rush into using your home equity for various nonessential issues, such as remodeling.

How to save better for retirement

The earlier you start saving, the better. However, no matter when you decide to start, it’s important to remember that you’re not alone, as there are many other seniors who have a hard time finding their way out of this mess. As Debra Greenberg, the director, of Retirement and Personal Wealth Solutions, at Bank of America, advised, “It’s never too late to start.”

Contribute to your 401(k) account

If your employer has a traditional 401(k) plan and you are eligible, it will let you contribute essential pretax money, which might potentially save you later. For example, let’s say you are currently in the 12% tax bracket, and you plan to contribute $100 /pay period. As the money that comes out of your paycheck before other federal income taxes are all assessed, your take-home pay might drop by only $88 (besides the amount of applicable state and local income tax, but also Social Security and Medicare tax).

This basically means you are able to invest more of your income, without feeling all that pressure in your monthly budget. If your employer’s 401(k) plan also has a Roth 401(k) feature, which is based on income after taxes rather than pre-tax funds, you might want to consider what your income tax bracket will be in the future.

Dorothy