A common concern for many retirees is running out of money during retirement. Unfortunately, there is a reason to be concerned. Healthcare costs are high, people are living longer, and other issues are present. Also, the best financial planning can’t eliminate the risk of running out of money completely during retirement. While this is true, it can make this situation less likely. What’s even more important is that this will help you enjoy more freedom during the retirement years instead of spending the last 30 years of your life worrying if you will be broke soon. To help secure your retirement finances, use the tips below. Keep in mind, planning early and using tools like a check stub maker and expense tracker can help you figure out how much you need to live off of when you retire.
Reduce Your Fixed Costs
If you want to ensure your money lasts as long as possible, you must reduce your must-have costs. These include things you cannot go without, such as transportation, food, debt payments, insurance, and shelter. It’s also a good idea to make sure you have the right size housing to reduce your fixed costs. For some, this will mean staying in a larger home and getting roommates. This is going to reduce costs for everyone. Doing this will also give you more flexibility if you hit any financial adversity in the future, such as a recession, home repairs, or major medical costs.
Maximize the Social Security Benefits You Receive
Starting your Social Security benefits at 62 is appealing to many retirees. After all, who wouldn’t want to get a check from the government every month? However, if you begin receiving these benefits too soon, it will reduce the benefits you receive now and in the future. It also means the smaller cost of living changes later in your life when you may really need them. The longer you expect to be alive, the more likely you will be to run out of money during retirement. If you are like most people, you probably plan a long retirement. You should view the benefits you receive from Social Security as a type of longevity insurance. This is a stream of income you can’t afford to outlive.
Think About Guaranteed Income
In the past, people could retire and live well off their Social Security and pension. Both provided nice income streams to pay for the remainder of your life. Today, it can be beneficial to have some type of guaranteed income during retirement. It should be enough to cover all your necessities, such as food and housing, in a perfect situation. Consider speaking to a financial planner about establishing a source of guaranteed income with a portion of the savings you have for retirement. There are several options, and the financial planner will be able to help you choose something based on your specific situation and needs.
Create a Retirement Spending Plan
Everyone hates budgeting. While a spending plan is similar to a budget, it should be a bit more exciting. With a spending plan, you set aside money for fun activities, such as going out with friends, shopping, or traveling. With budgeting, you use a financial professional to let you know how to invest your money so you don’t die poor. With a comprehensive spending plan, you can figure out what you want to be able to afford when you retire. From this point, hiring a financial planner will help you determine the nest egg type needed to support what you want to do in retirement.
If you don’t have a plan for your retirement income or some type of spending plan when you retire, it will increase the possibility that you will run out of money as you get older. However, with these financial tools, you can avoid this situation and enjoy a comfortable retirement with the money you need to do the things you want to do.