Today I have a guest post for you from Phil Bradford about saving strategies after retirement.
Phil is a financial web enthusiast. He has expert knowledge about personal finance issues. His passion for helping people who’re stuck in financial problems has earned him recognition and honor in the industry. Besides writing financial articles, he loves to travel and cook.
Welcome to the blog Phil!
After retirement most of you have plans for going on a world tour, starting your business, buying your home, and the like. Achieving these plans require a lot of money. Even if retirees don’t have these lavish plans, they’ll require money to meet the basic expenses of life.
You can live a debt-free and a stress-free life after retirement only if you have a healthy retirement fund. For that, you need to revisit and make some planned changes in your financial life.
To make your retirement more relaxing, check out some money saving strategies here:
1. Accept the fact that you’re retired
Accepting your retirement will give you the power to make further changes in your monetary life. Learn that your life is not the same that it used to be before retirement. You cannot freely spend money now unless you have a regular cash flow. Once you accept this change in your life, nothing will be more difficult.
2. Get a financial checkup
If you don’t know from where to start or you’re not sure whether or not you’re moving in the right direction, get a money checkup done immediately. That is, visit a financial advisor and set financial goals, which will complement your retired life.
3. Create a retirement budget
Never ever think that since you’re retired you don’t need a budget to manage your finances. In fact, you require a budget more than anyone else. Your finances have gone through a major change after retirement. So, create a realistic budget according to the changes that have taken place after you’ve retired and try to stick to it.
4. Clear dues as soon as possible
Though it is not a money saving strategy in the literal sense, yet you can save your precious dollars if you’re out of debt. If you’ve retired with debt, then you must first concentrate on paying it off. By doing so, you would be able to free up money for meeting other expenses.
5. Keep investments in a place where they can grow
Stack your money somewhere they can bloom. In worst cases, such as if the economic market gets hit by the recession, you’ll require 18 months’ of living expenses (as per the financial experts most recessions rarely stay more than 18 months) to survive.
Transforming assets into certificates of deposits or converting them into other assets, which won’t grow is dangerous. You should keep investments in places where there are chances of growth like the stocks. According to Linda Lubitz Boone, president of the Lubitz Financial Group in Miami, “you don’t have a loss until you sell. All you’re seeing is things go down on paper.”
6. Claim Social Security benefits when you’re 70
You won’t get the maximum Social Security benefits at age 62, 66 or 67. Payments will increase by 8% each year after your full retirement age. On this ground, if you hold your benefits up to age 70, you’ll get the maximum benefits ever.
7. Shift to a less expensive area
The cost of gas, groceries, insurance and taxes vary according to the place where you live. If you stay in a low-cost area, all these expenses will also be less. So, if possible, consider moving to a place where the cost of living is cheaper as compared to your current place of living. This way, you can free up a lot of money to meet other expenses.
8. Take up a part-time job in retirement
Again, it’s not exactly a money-saving strategy, yet you can save money if you have the opportunity to earn money. Remember, “a penny saved is a penny earned.” Just because there’s no regular cash flow, it doesn’t mean you’ve to stop paying your bills.
A part-time job means you’ll draw less money from your retirement fund. Moreover, it’ll keep you busy and mentally active during your gray hair days.
Few pieces of advice
Since life undergoes a massive change after retirement, you have to re-arrange things accordingly. However, it’s all about saving money no matter how you do it. Never lose a chance to earn money even if you’re retired. Also, make it a point to find out ways to save more money and consult a financial expert where required.
Living a peaceful retired life is not tough. You just have to be more sincere about your finances and think twice before spending your precious dollars. If you can accept the limitations of a retiree’s life, on one can stop you from enjoying a relaxed retirement.