Saving Money After Retirement: Budgeting Advice for a Secure Financial Future
People spend years aggressively saving for retirement, but having a healthy portfolio doesn’t allay the fear many seniors have: running out of money in retirement.
With inflation rates increasing and the ever-rising cost of healthcare, those fears are quite understandable. Still, there are plenty of ways to save money and enjoy your retirement years stress-free.
Consider your Social Security options
If you have a healthy cash flow that supports your lifestyle now, wait as long as possible before dipping into your Social Security. Although you can draw from your Social Security beginning at age 62, your benefits increase up to 8% annually for every year you wait up to the age of 70.
For married couples, there are benefits and drawbacks for each spouse to claim their Social Security at different moments, depending on their income. If you can afford it, the higher earner should wait the longest before claiming Social Security in order to maximize the benefits. Of course, this depends on how much you have saved up, your lifestyle, health status, and various other factors.
In short, be strategic. The longer you can delay drawing from your Social Security, the better. Check out the Social Security Administration’s benefits planner resource to get a better sense of how much you can save.
Create a retirement spending plan
Sometimes, you need to adjust your budget to live stress-free in retirement. Inflation, savings accounts for your grandkids, unexpected expenses… things might have changed since you first made your retirement plan years ago. By updating your spending plan, you might find ways to tweak it so your money goes further.
Things that should be part of your spending plan include travel, groceries, activities, clothing, and entertainment. Don’t forget your fixed expenses, such as car payments, insurance, and housing costs.
Once you’ve listed all the things you’re spending your money on, look at the margins. How much of a gap is there between what is coming in and what is going out? If the margins are narrow and make you uneasy, you have two options: make some lifestyle changes or earn more money.
Here are some lifestyle changes that help retirees make their retirement income last longer:
- Minimize your fixed expenses: Consider things like getting a reverse mortgage, downsizing to a smaller home, moving into a senior community, and selling your vehicles.
- Find a more affordable place to live: Moving to a state or region with a lower cost of living can save many retirees tens of thousands of dollars annually.
- Take advantage of discounts: Take advantage of senior discounts, and use website extensions like Honey or Capital One to find the lowest price on items you buy online.
Finding new sources of income
If you can’t trim more from your budget, the next option is to increase your income. Many retirees return to work after a few years of retirement, not only to increase their income but for social interaction as well. Returning to work after retirement doesn’t have to look the same as your pre-retirement days. In fact, most retirees look for jobs that fuel their passions.
Another way to increase your income and pad your budget is to search for guaranteed income. One way to do this is to invest in vacation rental properties. Some retirees sell their primary home, move into an affordable apartment or condo, and use the remaining proceeds to purchase an investment property. The guaranteed income from these properties can cover much of your household living expenses.
Of course, you’ll want to invest in a property in an in-demand location, so work with a real estate agent to pick the most profitable location for your budget. Your financial advisor can also help you make sure that any money you save continues to earn you more money!
The bottom line
Making sure you have enough savings to last throughout retirement is a top priority for most seniors. After all, no one wants to have to worry about running out of money during their golden years. One of the best ways to ensure a secure financial future is to budget your retirement income and spending wisely.
Now’s the time to treat yourself to all-inclusive senior living, with everything you need to enjoy the best that life has to offer under one roof. As a resident of our senior living community, you’ll enjoy maintenance-free apartments, cottages or villas with all the amenities, plus the comfort of knowing you have a secure financial plan for your future.