What is the best retirement choice that I have if I'm a lower middle class person? What are the strategies to take advantage of it?

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Larry McClanahan, Financial Advisor

@LarryMcClanahan • 11/03/15 This answer was first published on 11/03/15. For the most current information about a financial product, you should always check and confirm accuracy with the offering financial institution. Editorial and user-generated content is not provided, reviewed or endorsed by any company.

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Here are a few retirement ideas for folks in lower-middle class income and tax brackets:

If you have a 401(k) or similar retirement plan where you work that offers matching contributions from the employer, be sure to contribute whatever is necessary to leverage that full match. It's "free money" to you.
In a lower tax bracket, an income tax deduction for pre-tax contributions to a retirement plan may not be that valuable to you. Consider instead contributing after-tax to retirement plans: (1) the Designated Roth Account in your 401(k) if available through your employer, or (2) a Roth IRA you establish on your own. You probably won't miss the tax deduction and you'll be creating future tax-free resources for retirement.
Work as long as you can and (under current rules) defer taking your Social Security for as long as possible. For folks whose Full Retirement Age is currently 66, they'll get a 32% larger benefit if they wait to collect Social Security at age 70. Plus working longer means you won't be drawing on your other retirement resources, giving them more time for potential growth.
Consider ideas for creating alternate income streams that could continue into your retirement. For some, this might mean owning rental property (that may or may not be financially possible for you, or you might not be interested in the landlord thing). For others, it might be starting a small "gig" on the side, a business which you (or spouse, if applicable) can run while you're otherwise employed.

I hope that helps. All the best!

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