Thinking of your golden years, what’s your dream scenario? For some, it’s traveling or renewing a long-delayed passion like painting or sculpting. To others, it’s time for grandkids or some well-earned rest. No matter what your dream is, you’ll definitely need money to make it come true and that takes retirement planning.
Unfortunately, the 2020 Retirement Confidence Survey says only 27% of Americans are very confident that they’ve saved enough for a comfortable retirement. Here are ideas for addressing that deficit.
Five Big Ways to Save and Make Money in Retirement
The National Institute on Retirement Security says Americans struggle to save as early and as often as needed for retirement. The resulting shortfall in their nest eggs is being compounded by rising senior costs for things like healthcare.
In retirement, the following strategies can help preserve what savings you do have and build more.
1. Downsize your home.
As tempting as it is to stay in the home where you made a lifetime of memories, it comes at a cost. Even if it’s fully paid off, maintaining a bigger home than needed takes more money to insure and maintain than a smaller one. There’s also the mental worry and physical effort that comes with the upkeep of a larger home.
Downsizing gives you the freedom to choose a new home with amenities you’ve always wanted or to relocate to a new city to be closer to your kids and grandkids or just for the fun of it. Plus, you can boost your nest egg with whatever portion of the sale proceeds you don’t use for a new home. Depending on your home’s equity, this can be a substantial influx of cash.
2. Ditch that second car.
Many married couples own two cars to get to and from work and other activities without inconveniencing each other. Mostly out of habit, they keep both in retirement, but at a big price. According to AAA, the average annual cost of owning a car costs $9,282, which includes everything from depreciation and insurance to gas and repairs.
That money could be spent on more useful things like helping to pay for some necessary expenses, building up an emergency fund or even taking a once-in-a-lifetime vacation.
3. Wait on social security.
Even if you want to retire early, it pays to delay your social security benefit. Although you can take it as early as age 62, that choice reduces your benefit. For those born in or after 1960, the monthly benefit decreases by 30% when taken before their full retirement age of 67, reducing a $1,000 social security check to $700. That’s a total loss of $18,000 over five years.
On the flip side, if you wait until you’re 70, your benefit increases. Use the Social Security Administration benefit calculator to figure out the best time to take your benefit.
4. Declare independence from your kids.
Ever since the Great Recession, more parents have been footing the bill for their grown children. Unfortunately, a recent Bankrate survey shows that this financial generosity has put the retirement future of 50% of American parents at risk.
Are you unable to save for your retirement because your adult children have moved back home or otherwise rely on you financially? A push toward financial independence will ultimately benefit them and you.
5. Get a job.
Just because you leave behind your career at retirement, doesn’t mean you can’t pick up a post-retirement job doing something you like. It adds to your monthly income while keeping you physically, mentally and socially active.
Five Little Ways to Stretch Retirement Dollars:
For those already retired, try these day-to-day, money-saving tips.
6. Say no to over-donating.
You don’t have to save every polar bear or give to every charity. Pick one or two reputable organizations whose missions are important to you and donate only what you can afford.
7. Stop subscribing.
Take a look at all of your newspaper, magazine and streaming subscriptions. For those you don’t use or really like, cancel them.
8. Reduce spending.
9. Capitalize on senior discounts.
Many businesses offer discounts for people as young as 55 and up. For starters, check your favorite grocery store, pharmacy or restaurant to find out if there is a certain day of the week or time of day when seniors enjoy a discount.
10. Ditch what’s unnecessary.
As much as you might hate to admit it, landline phones and cable TV are yesterday’s news. Cut the cord and enjoy the cash. And while you’re at it, sign up for bill pay rather than mailing your monthly bills.
None of these little things require a big sacrifice, but they’ll make a big difference to a fixed-income budget.
Editor’s note: Quorum is not affiliated with any of the companies mentioned in this article and derives no benefit from these businesses for placement in this article.