We believe it’s perhaps one of the most common question that retirees ask financial services professionals: How do I make my money last for my lifetime?
An AARP article, 5 Tips to Make Your Money Last a Lifetime has some recommendations that many of you may find useful.
Save enough for the long haul
The first recommendation is to focus on saving enough to see you through your ideal retirement. Remember, retirement is your reward for decades of hard work, so you want the opportunity to thrive in retirement, not merely survive it. Look at how much you currently have saved, your likely longevity, your expected Social Security benefit and other potential sources of retirement income. Next, determine how much you’ll need to spend each month to maintain your preferred retirement lifestyle.
Cut back on spending
The article’s next recommendation is to find some ways to cut back on your spending. For example, the article references a CreditCards.com poll that determined nearly 80% of parents have helped their adult children financially.
Interestingly, these parents added they would have otherwise used that money to improve their own financial standing by paying off debt or beefing up their emergency fund.
It’s certainly human nature to want to help those you love the most, but the reality is being too generous may imperil your own retirement. It can be very hard but learning to say no is one step that may help solidify your retirement.
Plan for future healthcare costs
The next recommendation, begin planning early for future healthcare costs, is a biggie. If your current employer offers a health savings account, often referred to simply as an HSA, in conjunction with a high-deductible health insurance plan, you may want to consider enrolling in it.
As the article notes, you can save pretax dollars that continue to grow tax free. Perhaps even more importantly, when you withdraw money to cover qualified medical costs, you may owe no taxes.
Additionally, look into whether you may be entitled to wellness benefits like partial coverage of a gym membership. Just a handful of hours a week working up a sweat doing something you enjoy may end up saving you a nice pile of money in the future. Getting in better shape before retirement may also help make your post-work life a little easier and more enjoyable.
Keep a resume handy
Maintaining an updated and polished resume is the article’s next recommendation. Preparing for a longer life may mean working longer or working part-time after you’ve retired from your previous career. In either case, having a ready-to-go resume may be important.
If you’re in your 50s and you and your financial services professional determine you need to increase how much you’re saving, leveraging your skills and experience into a pay raise or a new job entirely, may be a solution. Even if your satisfied with your current job and salary, keeping an updated resume on your laptop may help you land a side gig doing something that fits with your current skills or doing something you’ll enjoy.
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