Retirement can come quicker than you think. While you may be dreaming about all of the free time you will have without a morning commute, the fact is that many people do not have enough money saved to retire the way they want.
The 2019 Survey of Consumer Finances reported by USA Facts, found that approximately half of American households had no savings in retirement accounts. The same survey found that only 21% had over $100,000 in retirement savings, and as little as 7% had over $500,000.
Fast forward to 2023, and GOBankingRates’s survey found that even fewer people had $100,000 or more in their retirement accounts. When asked, only 14% of respondents had that amount stashed away for their golden years. Unfortunately, it just may not be enough. With longer life spans and a higher cost of living, you’ll need more money than ever to retire.
Luckily, we know a few ways that you can save big to make your money go further. Here are 10 money-saving tips for after retirement.
Consider a Side Gig
The last thing most retirees want to think about is work, but picking up a part-time job may offset some of the retirement costs. The best thing about a side hustle is that you can pick and choose what you do.
You may not need to make a full-time salary in order to get by, so you can opt for something that you actually enjoy doing. You can also be more selective about the hours you work. Staying active into retirement will not only help keep your wallet healthy, but it can also keep you mentally and physically fit as you age.
Another consideration if you are tight on cash when you retire is to downsize. A smaller house or apartment can lead to substantial savings. Not only will your rent or mortgage be less, but your utilities and other monthly expenses should be more affordable as well.
If you live in a city with a high cost of living, you might want to think about moving. If taxes are eating into your savings, look into states with no income tax or tax incentives for retirees. The more that you can cut down on your fixed costs like your rent or mortgage, the better off you’ll be.
Wait on Social Security
Another trick for those hoping to get a little extra cushion during retirement is to wait on claiming social security. Your benefits increase by a certain percentage each month you delay beyond full retirement age. The benefit increase continues until you reach the age of 70.
Continue to Invest
It may seem counterintuitive, but retirement is not the time to stop investing. Continue to invest throughout your retirement to make your money work for you. It’s important, however, to work with a financial advisor who can help you make sound investment decisions. Retirees are particularly vulnerable to investment fraud and other scams, so you want to work with a trusted professional.
Think About a Reverse Mortgage
A reverse mortgage is another option for retirees that need some extra money. A reverse mortgage is a loan against your home. Instead of you paying the lender each month, the lender gives you a lump sum of money. The money is repaid once the home is sold or you no longer live there.
Take Advantage of Discounts
If you want to cut costs quickly, be sure to look for senior discounts. Far too many retirees never take advantage of the savings that are offered by companies across the country. Everything from retail and restaurants to travel and grocery stores offers discounts for seniors. Never pay full price again.
Set a Budget
If you have never set a budget, now is the time. Without a regular paycheck, you may need to track carefully what you spend. Establishing a budget can help you understand how you spend money and where cuts can be made if necessary. Many financial institutions offer budget calculators to help you determine how much you can live on each month.
Get Rid of Debt
It isn’t just 30-year-olds that are in massive amounts of credit card debt. According to the National Council on Aging, over 34% of senior households held credit card balances. Seniors are also more likely to have medical and housing debt compared to the past. Paying off high-balance credit cards can leave more money in your wallet each month.
Review Your Insurance Policies
If it’s been a while since you’ve reviewed your insurance policies, now’s a good time to start. If you’re driving less because you’re no longer commuting, be sure to let your car insurer know. Just reducing the number of miles that you drive each year can reduce your premiums. You can also shop around to see if you’re getting the best price.
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