As you get closer to retirement, it’s important to have a solid plan in place that sets you up for long-term financial security and a worry-free lifestyle.
While you may have already built a cushy nest egg that could sustain you for the next two to three decades, take some extra steps to ensure you’re fully prepared by setting aside $100 from your last paycheck to invest in your future.
Three Best Ways To Spend $100 Before or Right After Retirement
“While $100 might seem like a drop in the bucket when considering the grand scope of retirement planning, its strategic use can provide educational benefits, peace of mind, and a touch of financial diversification,” said Andrew Latham, Certified Financial Planner and the Director of Content of SuperMoney.com.
Here’s how he recommends allocating your $100 bill to ensure your golden years are free of financial stress.
Invest in Financial Education
Latham believes that one of the most impactful ways to spend $100 before or immediately after retiring is to invest in financial education. Here’s why: When you transition into your retirement years, your priorities change. Without a monthly or biweekly paycheck coming in from your 9-to-5 job, you have to be even more mindful of how you spend your savings and preserve your assets.
So, if you have not already created a budget or developed a sound financial strategy for your Golden Years, it’s time to take action and educate yourself on these topics.
“Buying books, taking online courses, or attending workshops tailored for retirees can all provide invaluable knowledge that empowers you to make informed decisions, avoid common financial pitfalls, and maximize the potential of your nest egg in retirement,” said Latham.
Here are some free or affordable financial education resources to look into:
- Retirement planning courses on Udemy: Multiple online courses available for under $100. They offer insights on retirement planning, from understanding social security to managing retirement investments.
- AARP: The American Association of Retired Persons (now known as AARP) is a non-profit organization that offers a wealth of free articles and resources on retirement planning.
- Personal Capital: Free financial software that helps you track your spending, net worth, and progress toward retirement.
- Purdue University Planning for a Secure Retirement: This course has ten learning modules you can work through each module at your own pace.
If your budget frees up in the future and you have more than $100 to spend on financial education, consider investing in a session with a professional financial planner for more personalized advice. They can take a deep dive into your finances and help you uncover areas for improvement.
Review and Update Essential Legal Documents
“Retirement is a significant life event, and it’s crucial to ensure all your legal documents reflect your current wishes and situation,” said Latham.
He recommends using your $100 to consult with a professional who can help you review or draft essential documents like wills, living wills, or power of attorney.
“These documents ensure that your assets are distributed as you desire, medical wishes are followed and trusted individuals can make decisions on your behalf, if necessary,” he added.
While it might seem morbid to think about death during a time as exciting as retirement, being proactive about your legal documents can offer security and peace of mind to you and your loved ones.
Diversify Through Micro-Investing
“The principle of diversification remains relevant even as you approach or enter retirement. With $100, consider diving into micro-investing platforms that allow you to invest small amounts across various assets or sectors,” said Latham.
Online investment brokerages like Acorns, M1 Finance or Stash all allow you to start investing with minimal amounts as low as $100.
While $100 may not seem like a significant amount, diversifying your investments and sticking to a sound strategy can yield modest returns. And let’s not forget about the power of compound interest, which can supercharge your nest egg and sustain you for decades to come.
Other Ways To Prepare for a Worry-Free Retirement
Besides strategically investing your $100 bill to plan ahead and prepare yourself for retirement, here are some other ways to set yourself up financially for the next few decades.
- Learn How Medicare Works: When you retire after 65 and are no longer enrolled in employer-provided health insurance, you’ll rely on Medicare for health insurance coverage. Before going into retirement, educate yourself on what each of Medicare’s four parts covers, how to sign up, and how much to budget for premiums. If you think you might face coverage gaps, start exploring Medigap policies to bridge those gaps.
- Decide When to Claim Your Social Security: The government bases your monthly Social Security check amount on whether you’ve reached full retirement age. Typically, delaying Social Security benefits until 70 will result in an increase in benefits. But depending on your health and financial circumstances, it may make sense for you to claim benefits early instead of waiting for a larger check down the line.
- Consider Refinancing Your Mortgage: If you’re thinking about refinancing your mortgage, consider doing while you’re still employed and receiving regular paychecks. While it’s possible to qualify for a mortgage with good terms post-retirement, you may have to jump through a few extra hoops.
- Explore Ways to Generate Passive Income: If your 9-to-5 job is your only source of income, start exploring other ways to make money before entering your Golden Years. For example, starting a blog to earn ad revenues passively or creating a digital product. Having several streams of income that require minimal maintenance will allow you to regularly replenish your nest egg without sacrificing your quality of life.
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