Are you worried about running low on cash during your retirement? This is a common worry among both retirees and pre-retirees. You’re more likely to have this concern if you got a late start with your retirement savings. And if you have this concern, you’re not alone. A recent survey conducted by the Employee Benefit Research Institute found that American workers are lagging behind when it comes to preparing for retirement.
Those who said they aren’t saving enough cash said they plan to make up for the shortfall by either socking away more money in the future or delaying their exit from the workforce. However, if you plan to stay longer in the workforce, know that this may not be a viable option. Some of the study’s retirees stated they had to leave the workforce earlier than planned due to poor health or disability.
Luckily, there are some alternative money moves you can make now that will help you turbocharge your retirement income. One way is through making smart decisions with where you put your cash. Choosing a bank that gives your money the best chance to grow is a smart move to make before and after retirement. The Cheat Sheet spoke with Ken Tumin of DepositAccounts.com to learn more about how to give a lackluster nest egg a boost.
The Cheat Sheet: What is the easiest way to boost retirement income?
Ken Tumin: One of the easiest way to boost retirement income is to move cash from a brick-and-mortar bank savings account to an internet savings account.
CS: How can high-yield reward checking accounts factor into one’s goal to boost retirement income? Could you recommend a few?
KT: Most checking accounts pay little or no interest. If someone maintains a $25,000 balance in a checking account, a high-yield reward checking could result in $500 more interest each year. Two banks that offer reward checking accounts nationwide are Michigan-based Main Street Bank and Kansas-based KS State Bank. Both offer online applications.
CS: How can a financial planner help someone boost their retirement income?
KT: A financial planner can help with boosting retirement income by creating a detailed financial plan. A planner can point out your blind spots when it comes to money management and help you adjust your plan accordingly. Just creating a plan and implementing it can increase investment returns and reduce expenses. A certified financial planner can help with that.
CS: What are some of the top mistakes retirees make when trying to boost that income?
KT: Some of the top mistakes are taking too much risk by attempting to increase yield. This can be dangerous. It can also be dangerous to invest in products that you don’t understand.
CS: What should a retiree do if they get to a point where they realize they’re running low on retirement money?
KT: If a retiree realizes they are getting low on retirement money, he or she should check to see if their banks are offering competitive interest rates on their savings and if they’re being charged fees. Move your money to a better bank or credit union that offers higher interest rates and lower fees.
CS: Anything to add?
KT: For the savings that retirees want to keep safe, choose the right mix of reward checking accounts, savings accounts, and CDs based on maximum return and desired levels of flexibility and effort. The DepositAccounts.com tool “Where to Grow Your Cash” can help.