How to Make Your Money Last in Retirement
Since there is no exact timeline on how long we will live or what our future may hold, it’s understandable to have questions and concerns about the road ahead.
Whether you are already retired or just beginning to consider your retirement years, the question "Will I outlive my money" is most likely a top concern. Thankfully, there are several ways you can increase the odds that your finances will last as long as your retirement chapter.
Here are a few options to help your money last:
Create a Retirement Spending Plan
Similar to a budget, a spending plan helps you organize your finances for activities such as traveling, shopping and other leisurely activities. Having a plan that is well thought out will help you establish the details of what you’d like to be able to afford during retirement.
Working with a trusted financial advisor during this time can help you support the retirement you’ve always dreamt of.
Without a proper spending plan, overspending can occur. This is a common occurrence during retirement years, and is similar to overspending earlier in life, the difference being that many of us are unsure or unaware of how to properly plan our income during that time.
A good starting point for withdrawing your savings in retirement is four percent per year. For example, if you saved a million dollars for retirement, the four percent rule would have you expecting to earn approximately $40,000 a year from your savings, not including any Social Security benefits.
Keep Earning, Even Part-Time
If you’re passionate about your career or enjoy helping others, you may benefit from waiting to retire for an extra year or two. Not only does staying involved increase your overall standard of living, but if you’re healthy enough and willing to continue working, your Social Security could end up being greater in your remaining years.
This will also allow your retirement assets to have an extra year to expand and strengthen. Encouraging your wealth to last throughout your retirement is easier to manage when you’re still earning and your finances don’t need to work as hard to last.
You may also want to consider transitioning out of the workforce slowly. If you’re in a position to take on less responsibility or work part-time, you may find that continuing to work is less of a chore and beneficial in the long run.
Put Health First Now
We all know being sick can take a toll and be quite costly. Making healthier choices throughout our lifetime can help reduce the odds of suffering from diabetes, high blood pressure, arthritis and other chronic illnesses, thereby lowering healthcare expenses.
As we grow closer to retirement, it’s important to take into account that spending money on a healthy lifestyle, as well as receiving regular screenings and accurate medical care, can help improve quality of life.
Spending on preventive care now can reduce expenses in the future.
Don’t Wait to Take Control of Your Finances
When it comes to funding your retirement, most Americans use a combination of Social Security, savings and pensions. It’s important to set yourself up for success and think outside of the box since these components may not always meet your expectations.
Keeping in mind the structure of your costs and the details of your income now as a pre-retiree will help you maintain your wealth in the long run and throughout your retirement.
Remaining in control of your finances and always being aware of how much you’re spending will allow you to focus your time and energy on retirement experiences that matter most to you.
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This content is developed from sources believed to be providing accurate information, and provided by Kelly Financial Planning. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security.