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What should I do if I'm close to retirement and haven't saved?
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If you're within 10 years of retirement and haven't accumulated much in the way of savings, there are still steps you can take to cushion your landing.
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First figure out just how much income you can expect to be taking in. Contact Social Security to determine your projected payments, and factor in any pensions or annuities you might have coming. Once you've arrived at a realistic baseline number, you may find you'll need to adjust your expectations as well. It may turn out that you can live nicely on less than you planned. And there are ways to reduce your expenses in retirement--you might downsize from a big house to an apartment, for example, or even move to a cheaper area of the country.
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Even as you think about scaling back, you should be pumping up the amounts you're contributing to retirement accounts. Your retirement may last a good long time, and the money you put in stock mutual funds now will help supplement your Social Security check down the road. You don't have to start withdrawing from a 401(k) until 70, and you can keep the money in a Roth IRA as long as you like. Once you max out on tax-deferred investments, by all means invest in taxable accounts as well. And if it's an option for you, start your own business and open a Keogh account (a retirement vehicle for the self-employed), as an additional tax haven for your savings.
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Finally, you may want to consider delaying your retirement a few years, or easing into it by taking a part-time job. Not only will you keep an income stream flowing, but you'll preserve the compounding benefits of your tax-deferred investments for longer.
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