Not everyone retires with a substantial nest egg. A lot of seniors end up preparing insufficiently for retirement. Because their retirement dollars are limited, it’s integral that they use their funds judiciously and carefully. If you are already in the midst of retirement and are plagued with this issue, you’re probably asking yourself this question: How do I make my retirement dollars last?
Thankfully, there are a number of steps you can take to make this possible but it’s going to require foresight and a lot of planning on your part. With these steps, you should be able to maximize the use of your retirement funds:
Sell your home and move to a smaller place.
You most likely own your home free and clear if you’re already retired. With the kids gone and only you and your spouse are living in your home, you probably don’t need all the extra square feet of space. Consider selling your house and using part of the proceeds to buy a smaller, less expensive place. You can also put the rest of the proceeds from the sale to your retirement account. Aside from being able to beef up your nest egg with the sale, living in more modest quarters will also allow you to save more in terms of the maintenance and repair expenses, utilities, taxes and homeowners insurance fees.
Keep in mind that choosing a cheaper home does not mean buying any home with only the price tag as your sole criterion. Endeavor to find a home that’s friendly to people your age. That means steering clear of two-story homes as stairs aren’t very ideal for seniors. See to it that there are safety features in the bathrooms and other areas of the house or have them equipped with it before you move in.
Live closer to your children.
If your children are willing to help you out when you’re older, you can consider moving to a place closer to where they live. When you’re older and need assistance to fend for yourself, you don’t need to hire expensive help. Your children will be able to help you during these times. This move will certainly help you extend your retirement dollars. Of course, a priceless perk is that you will be able to spend more time with your grandchildren.
Maximize your car savings.
As a retiree, you won’t be using your car as often as you did when you were still active in the corporate rat race. You’ll find that you’ll be driving your vehicle less often and will thus spend less on fuel, maintenance and repair costs. This makes car savings come naturally.
In addition to driving your car less, you can also save on your vehicle by asking for the discounts you are eligible for when it comes to car insurance. Attending driving education courses for seniors and fitting your vehicle with safety features will qualify you for discounts that will lower your premiums. In addition, most insurers also voluntarily offer mature drivers discounts for those over 50 years old.
Another way to ramp up the savings you can get from your car is to make use of public transportation. It’s still cheaper overall to commute by bus, train, taxi or some other public conveyance than drive yourself to a destination. It could even be safer for you, especially if you find that your vision and accuracy were not as sharp as they were when you were younger.
Live in a retirement-friendly state.
If the place where you live in now is too expensive, you can consider moving to a retirement-friendly state that has a lower cost of living. Recently, Bankrate ranked all the 50 states to determine which ones are the best places to retire in. The ranking was based on the cost of living, crime rate, quality of healthcare, tax burden, personal well-being and weather.
According to the ranking, the top 10 states that are very friendly to retirees are: 1) South Dakota, 2) Colorado, 3) Utah, 4) North Dakota, 5) Wyoming, 6) Nebraska, 7) Montana, 8) Idaho, 9) Iowa and 10) Virginia. Meanwhile, the 10 worst states to retire in based on the above criteria are: 1) New York, 2) West Virginia, 3) Alaska, 4) Arkansas, 5) Hawaii, 6) Alabama, 7) Louisiana, 8) Oklahoma, 9) Maryland and 10) Kentucky.
By choosing to live in a city that is friendly to retirees, you will give more mileage to your retirement dollars.
Live on a strict budget.
When you know that you only have a limited amount to spend for each month, you need to make sure that you follow a strict spending plan. Age has most probably curbed your impulsive buying tendencies so you won’t have problems in this area. You also will most likely save a lot on food as your health will probably require you to eat more fruits and vegetables than meat.
However, you will have to be careful on how much you spend for your leisure activities since you have a lot of time in your hands these days. With limited funds, you might not have a lot of opportunity to travel abroad. If you still intend to, however, you are going to have to do a lot of preparation and planning beforehand so that you can get a lot of discounts and good deals in hotels and airfare.
Get employed or start your own business.
One way to solve the problem of lack of funds is for you to start working again. Of course, this will depend on your overall state of health. If you are strong enough, you can seek employment—whether part-time or fulltime— in the field you just left or even in another field. There are a lot of seniors who continue to be productive as consultants in their industry because of their extensive experience.
If you have always been a risk-taker by nature, you can decide to start your own business. There are a number of private equity firms and venture capitalists in the United States who are willing to finance startups for as long as they exhibit potential for growth. Of course, this route isn’t for the faint-of-heart and you need to have both the mental and physical vigor to nurture your business. When it does take off, however, you can expect not only added income for your retirement but even leave a legacy and a potential fortune to your children.
Retiring with limited funds can be a challenge. However, it need not be as difficult as you may think. By instituting changes in your lifestyle and budget, you should be able to make your dollars last as long as you do. You can still retire comfortably and happily if you keep sight of what’s important.
At this time, the support of family members will really matter. When you can count on your children to help give you care when you need it, you will be able to stretch your retirement dollars further.
Since you obviously don’t want to burden your loved ones with your care when you’re older, it’s also important that you take good care of your health. Exercising regularly, eating healthy food and staying away from harmful practices like imbibing too much alcohol or taking drugs will help in this regard. When you are in the best of health, you reduce doctor’s visits and medication costs. You can also remain productive. When you can still work, you are able to fund your own retirement without relying on anyone.
It’s also worth pointing out that finding fulfillment in retirement even when you have limited funds is still possible. You can volunteer in causes that you believe in, whether it is offering to cook in a soup kitchen in your community or counseling individuals facing depression or other difficulties. Seeing that there are others who are in a more challenging situation than you are in will make you thankful for what you have. It will also give you a sense of fulfillment that you probably did not experience when you were still busy working and striving to make money to make ends meet.
Putting together a substantial nest egg for retirement these days is no easy task. It was easier before when traditional pension plans were the norm and companies were responsible for ensuring that their workers retired comfortably. Now that a decent retirement is in the hands of the individual employee through their 401k plans, the onus of ensuring a well-funded retirement lies in your hands. The best way to ensure that your retirement fund won’t run out before you’ve completed the race of life is to start investing early
If you were not able to put together a substantial amount when you were younger, don’t despair. You can still make the most of your golden years by taking critical steps to put your money to good use. For as long as you don’t splurge unnecessarily, you should be able to make the most of your retirement dollars.
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