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Making Retirement Savings Last
Date Published: Dec 7, 2022
A big financial hurdle with retirement is making sure you can make the money you have saved up last so you can relax, travel, and spend time doing what you love. With preparation, you can ensure that your finances stay golden so your retirement years are nothing short of awesome.
Keep Making Money
One way to make your savings last, that may seem pretty obvious, is to keep working, which can be more fun than it sounds.
According to a report by Provision Living, roughly 20% of the senior population in the United States are still part of the workforce. To add, 45% of the survey respondents mentioned that they could afford to retire, but enjoy working, and 55% of the respondents continue to work part-time, with the other 45% continuing to work full-time.
You don’t have to keep working a full-time job or stay at your current one. You can simply use your skills, talents, and interests to fuel your next money making venture. For example, if you enjoy playing the cello, you could take up teaching cello or look to join an orchestra.
Working after you are retired should be something that you enjoy and brings you happiness...and some extra cash.
Work With a Professional
If you are not quite sure where to begin when it comes to managing your finances during retirement, you want to know more, or just need some extra guidance, consider working with a financial expert. Even the best savers benefit from the advice of experts.
Financial planners and advisors are well versed and knowledgeable when it comes to managing one’s finances as a retiree. They can develop savings, investing, and spending plans that are customized to meet your needs to maintain your quality of life, even through the inevitable changes.
Beyond this, a financial advisor will also come into play when it comes to keeping your money safe and sound. According to AARP, people 50 and older have around 70% of the country’s bank deposits. This puts them in the cross hairs for financial exploitation. Unfortunately, some people like to use their time to make up new scams every day to try and steal your money. Fortunately though, there are ways to protect you from these scams. An advisor can help teach you how to avoid them and act as a bit of a security guard for you money.
Maximize Your Social Security
Beginning to collect Social Security at the age of 62 sounds nice and almost too appealing, but unless you are in dire need for extra cash, signing up at 62 will cost you. It may be best to wait as long as you can.
Starting Social security early can reduce the benefits you receive. For example, let’s say that you decide to take your retirement benefits at 62 when your full retirement age is 66. This can result in you losing 25% off your monthly payment.
Now, if you decide to put a hold on taking benefits past your retirement age, you will be rewarded with higher benefits. Waiting until the age of 70 can be ideal, because you will get the maximum possible benefit. 70 is also the age when benefits max out.
Your Social Security is kind of like your longevity insurance. It is a flow of income you can’t outlive, and using the benefits early will result in a smaller cost of living adjustments later in life when you may need them. Each person’s situation is unique, and meeting with a financial expert can help you figure out what is best for you.
Minimize Your Expenses
A pretty common practice when it comes to saving money is to identify and decrease your must-have expenses. There are the things you can’t go without like food, shelter, transportation and insurance. Finding ways to reduce your expenses will definitely give you a financial boost during retirement.
You can also find ways to save without cutting back on things. Retirement is an ideal time to take advantage of senior discounts at places such as restaurants, movie theaters, and grocery stores.
If you enjoy traveling, when you retire can venture out during off-peak times of the year, when hotels are usually cheaper.
There are plenty of ways to minimize your expenses and increase your savings, you just have to find them and take advantage of savings opportunities that arise.
Have a Rainy Day Savings
Having an extra savings account outside of your retirement can be very beneficial. Some retirement planners agree that you should have an extra sub account with at least six months to one year of living expenses.
This kind of account with the right amount of emergency funds will provide you with a safety net and prevent you from taking money from your longer-term investment savings for retirement.
Try to avoid keeping this money in cash if you can. There is no return on cash after taxes and inflation, so try to keep as much of your funds as possible in a savings account.
Take Advantage of the Stock Market
Growing your savings can help you to outpace taxes and inflation. Putting some of your assets into the stock market when you start retirement may help you accomplish this.
The best thing you can do when it comes to investing your money is to seek out guidance and don’t go charging in alone. Getting with an investment advisor can help you make the right choices for you.
Retire Like the Pro You Are
When you retire it can be a little nerve-wracking when that regular income flow you have had over the years from working hard is no longer there. That doesn’t mean you won’t be able to create a retirement full of excitement.
Retirement is a big, new step in your life, and like every big step you take, it can be a little scary. You are entering into a new adventure, and concerns about finances are legitimate, but you won’t be alone.
If you find yourself having questions, we are here to help. Wildfire has many products to help you save. We look forward to being here for you in any way we can to help you make your retirement legendary.