[vc_row][vc_column width=”2/3″ el_class=”section section1″][vc_column_text]Making your money last after retirement can be tricky. There are lots of programs in place to help with this, of course: Social Security should make up for about 40 percent of your annual income, but what about the rest? You are past your working years, and you shouldn’t have to live in poverty. But luckily, with some planning, you won’t have to. Here are a few tips you should be aware of that can help make sure your money lasts the rest of your life.
1. Spending Less
Most people who are transitioning into retirement will notice their monthly expenditures going down. To throw a few numbers your way: J.P. Morgan found that a couple in their 70’s spend an average of 53,000 dollars a year, as opposed to a couple in their 50’s spending 84,000 dollars annually.
- Also Read: 3 Reasons Certain Federal Employees Can Retire Years Earlier Than Their Peers Without Penalties
- Also Read: CSRS Retirement in 2024: Are You Making the Most of What This Classic Plan Has to Offer?
- Also Read: Roth IRA Basics for Beginners: What’s There to Learn?
2. Budget
Of course, counting on your expenditures going down is not going to make a difference unless you have a plan of attack in the form of a good, substantial budget. It is especially important to take into account things like inflation and interest rates when figuring out a budget that can work within your means.
If inflation rises at a rate of 3 percent annually, then within 24 years, a retired person’s expenses will nearly be twice as much. If you retire at 65, that means if you live to be 89, a feasible age, then you’ll be paying double for everything within that time. Without a strong income, this could spell trouble.
Traditional knowledge would dictate that the best way to budget for this is to only tap into about 4 percent of your savings each year without exception. This may or may not work, as flexibility and continued investments might make for a more wise withdrawal strategy.
3. Clear Goals
Having clear goals is always a smart move when discussing finance. But developing those goals, especially realistic ones, takes a bit of planning, and it might make sense to divide them up into smaller, more obtainable goals to start with. Paying off loans and mortgages should be a priority, but other goals such as desired holiday trips you want to take, as well as planning for healthcare costs should be factored in. Then you can weigh the risks and rewards of working towards each goal in more bite-sized chunks.
Short term goals like vacations should be put into high-interest markets so that the return comes much quicker. This markets are often riskier and not a wise strategy for long term savings. For the longer goals you have, certain stocks or IRAs might be the way to go that can help mitigate any fluctuations in the overall market.
4. Retire At The Right Time
This is often overlooked, but when you retire can have lasting implications on your future. While investing to help deal with inflation and other hidden retirement costs is the right strategy, if the market had taken a downturn right before you retired, this might not be the best time to put your eggs in that basket. If you can put off retiring until the market takes another upturn, then it might be a wise decision.
While predicting the stock market ups and downs might be a bit of a challenge, you can still do a few things to protect yourself, and each of the tips mentioned before this one may be an excellent place to start.[/vc_column_text][/vc_column][vc_column width=”1/3″][vc_single_image image=”37156″ img_size=”292×285″ style=”vc_box_shadow”][/vc_column][/vc_row]
