Yahoo Finance had an article about the two changes that will improve your odds of retiring. The article began, If you're over 50.....and then it recommended two changes.
Work 5 years more.
Instead of retiring at 65, work an additional 5 years and wait until 70 to retire. Those 5 years if saving $15,000 per year will increase the average person's retirement funds by 36% according to the article.
Now I don't know about you, but working an additional 5 years is not the highest item on my list. I admit that recent years have reduced or at least slowed the earnings made in IRAs and 401(k)s. It seems that things cost more, even though the "official" inflation figures always seem low lately. But working longer when I feel I already work long and hard is not attractive to me. What's the second choice?
A More Frugal Lifestyle
According to the story, reducing your lifestyle is the ticket to retirement. If you plan to retire with $100,000 then change your lifestyle "downward" to live on $85,000. I am not at all excited about this option either. These are the only solutions offered in the yahoo story and I believe there must be a better way.
Better Alternatives?
What about starting a small business part time? There are tremendous tax advantages and write-offs available to businesses. These savings can increase cash flow for other areas, including investing and saving for retirement. In addition, a person can develop a consistent, residual income that can help them live at $100,000 instead of $85000 as the Yahoo story recommends.
I believe that it is better to increase your income than to reduce your outgo. I have seen businesses and individuals that focused on saving money rather than increasing income, get into trouble because the mindset of decrease becomes their focus. Our focus has a tendency to control our direction. Lack thinking brings on "lack" results.
I own a small direct sales part time business and recommend others be positive, proactive, and focus on more income if they want to retire in a better fashion.
Just my humble opinion.