Ideas on how to have more money when you retire

Save More. Most people do not think about financial matters from a long-term perspective so they do not estimate how much money they will need for retirement, or if they do, they vastly underestimate how much they will need. The experts shy away from hard and fast rules about what you will need but aim to have between 60 and 70% of your income when you were working. In Canada and the United States, we have government programs in place for most people that aim to replace anywhere from 18 to 33% of that income. The good news is that you don’t have to try to save enough to cover 70% of your work income, you only have to save the difference between what the government income and what you think you will need.

The bad news is we are living longer, you have to accept that you will probably live longer than you expect. In many countries’ individuals are expected to manage their own retirement funds. Many of us will plan for average life expectancy, not realizing that this means that half of the people will live longer. The big risk is that you will outlive savings.

Learn about various sources of retirement income. Workers misunderstand what their primary sources of income will be in retirement. In Canada and the US, there are government programs in place to help. In Canada, we have the Canada Pension Plan, and the Old Age Security income, in the US you have Social Security. In Canada the Old Age Security and Income Supplement is the most important source of income for many people, in the US it is Social Security.

Educate yourself and learn how to manage your retirement savings plan. Due to the growth of retirement savings plans, individuals are now responsible for managing their investments. Most of us lack basic financial knowledge but need to become experts about work benefits and investing

Look for good advice. A significant portion of retirees and pre-retirees do not seek the help of a "qualified professional." Don’t’ be like most people who ask friends and family for advice.

I have many friends who retired then went to work, but they are in the minority. Don’t count on working. Plan early! Many of us will retire before we expect to and before we are ready. Nearly four in ten people retire due to poor health, caring for a family member, or job loss.

Deal with inflation. Inflation is a fact of life that workers usually deal with through pay increases. After retirement, it is up to people to manage their own assets or secure guaranteed income. Few people have the skills to manage income to keep up with inflation.

Face facts about long-term care. Many people underestimate their chances of needing long-term care. Relatively few people either own long-term care insurance or can afford to self-insure a long-term care situation.

Provide for a surviving spouse. Many married couples fail to plan for the eventual death of one spouse before the other and the resulting drop in income at the time of widowhood. Many more single women live in poverty in old age.

Make your money last for a lifetime. People often pass up opportunities to get a lifetime pension or annuity, failing to recognize the difficulty of making money last for a lifetime. People say guaranteed lifetime income is important, but in practice, they usually choose a lump sum.