It’s fair to say that hitting 60 with no retirement savings at all is not an ideal financial situation. However, it’s important to realise that at 60, there is still time to build up a sizeable savings pot for retirement so that you’re not entirely dependent on the State Pension payout of just £164.35 per week in your later years. Act quickly, and put a retirement savings plan in place as soon as possible, and you may be able to salvage your retirement after all.
With that in mind, here’s a look at four things I’d do if I was in this situation.
Delay retirement
The first thing I would do if I had no savings at 60 is delay my retirement. While many people like to retire around 65, I’d delay it until 68, as this would give me an extra few years to build up some savings. In eight years, a lot can be achieved financially.
Maximise my income
Next, I’d set about maximising my income. The first thing I’d do in this respect would be to ask for a pay rise and if I did get a raise, that extra money would be channelled into my savings. If I didn’t get the raise, it wouldn’t be the end of the world, as I’d also look at picking up some extra freelance work outside my regular job. These days, through websites such as People Per Hour, it’s easier than ever to pick up a little bit of freelance work.
Cut out expenses
Of course, I’d also look at stripping back expenses, in order to save more. I’d analyse my bank statement and work out what I could live without. Non-essentials such as Sky TV would be cut out. I’d also make sure I was on cost-effective plans for standard expenses such as electricity and gas, insurance, and my mobile phone. Spending a little bit of time on this could potentially save me thousands per year.
Build an income-producing portfolio
Lastly, I’d set about investing my savings across a diversified range of income-producing assets in order to build up a little retirement income stream to complement my State Pension payout.
I’d invest in assets such as FTSE 100 dividend stocks, which pay shareholders regular cash payments out of profits. For example, a £2,000 investment in Royal Dutch Shell could pay me around £120 per year in dividends alone.
I’d also look at investing some of my money in what’s known as ‘real assets.’ These are physical assets such as retirement villages and storage warehouses, which generate regular cash flows, pay out solid dividends, and are reasonably sheltered from economic downturns.
While I’d keep a little bit of cash available for emergencies, I wouldn’t want to have too much of my savings sitting in a bank account or Cash ISA as that money simply wouldn’t be working hard enough for me.
Turning 60 with no pension savings could be a little scary. Yet if I delayed my retirement until 68, I’m convinced that with a sensible retirement savings plan in place, I could turn things around.