4 Strategic Money Moves To Ensure a Stress-Free Retirement, According to Experts
Written by
Gina Hagler
Edited by
Travis Woods
Commitment to Our Readers
GOBankingRates' editorial team is committed to bringing you unbiased reviews and information. We use data-driven methodologies to evaluate financial products and services - our reviews and ratings are not influenced by advertisers. You can read more about our editorial guidelines and our products and services review methodology.
20 Years
Helping You Live Richer
Reviewed
by Experts
Trusted by
Millions of Readers
Following a savings strategy until you reach retirement is only the first step to enjoying your golden years. For example, if you then mishandle your savings and run into financial trouble, your careful saving will have been for nothing. According to experts, these four strategic money moves can help ensure a stress-free retirement.
1. Carefully Consider Your Expenses
This is an area where you’ll greatly benefit from being pragmatic. There are numerous expenses to factor in, from mortgage payments (or rent) to utilities to insurance tohealth care. Along with these major expenses, add up how much you’re spending on food, gas, entertainment and other costs so you can calculate how much you’ll need to budget if you make any changes in your lifestyle. One element to consider is inflation, as the amount of money you’re used to spending on groceries and other items is likely to be higher in the coming decades. Leave room for this in your budgeting between your estimate and the total cost of your expenses.
Part of calculating your expenses is finding areas to save money — the little things can easily add up. For instance, you definitely want to have paid off any high-interest debt, and couples with more than one car might want to sell one. Will you keep your paid streaming services? Think it through now to be better prepared later.
2. Health Care Costs
One of the big expenses of retirement age is health care, the cost of which is on the rise. One prudent method for covering these costs is to wait until you’re 65 to retire, when you’re eligible for Medicare. Alternatively, your employer health plan can save you more money than private coverage or COBRA. You might also fund a health savings account (HSA). It’s tax-advantaged, so you won’t pay taxes on your future withdrawals.
3. Delay Taking Social Security
Social security benefits taken at age 70 or older are significantly higher than those taken at age 66 or 67 (depending on your birth year) or before. This is because, at full retirement age, you’ll receive 100% of your benefits. Each year earlier will cause you to receive less.
4. Avoid Taking Risky Investments
As you get older, it becomes harder to recover from failed investments because there is less time before you’ll need the income. You want to preserve as much money as you can for more important things like medical bills. As such, you should prioritize safer investments like bonds and certificates of deposit (CDs) over riskier ones like stocks.
More From GOBankingRates
