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Last Updated on by Noni May
Over the years, you’ve likely heard that it’s essential to save for retirement. Put a little bit of money away from each paycheck into a high-interest bank account, many experts say. But what you’re told less often is how to make your money last in retirement. To help you maximize the savings accumulated over the years, see the tips below.
If you’re not sure if you have enough funds to last your retirement, then it’s important to lower how much you live on each month. Specifically, reduce your fixed expenses, such as rent or mortgage and transportation.
For example, it might make sense for you to downsize if you’re only using a few rooms in a big house. The amount you’ll save every month by moving to a smaller property can go towards helping you live comfortably as a senior.
While it’s not the first thing you might have thought of when it comes to stretching funds further in retirement, your health matters a lot to your financial future. If you fall ill or sustain a physical injury, medical costs can be high and quickly drain savings.
Staying fit and healthy doesn’t have to be a burden but instead can bring great enjoyment and be a chance to be social with group sports like tennis. Get regular health screenings too so that you’re aware of anything that arises right away to be able to take care of it now rather than let it progress unknowingly.
Even just working a few years longer than you might have planned initially could make a positive difference to your financial situation when you do retire. That’s not to say that it needs to be full-time employment.
Perhaps you reduce your working hours to half of what they were, for example. It could be that you stay on at the same company; they’re probably more than happy to scale back your hours in return for having you stay on longer as a valuable employee! Alternatively, consider taking on casual employment in a position that you’ve always thought about doing; it’s an opportunity to try something new and pursue a dream!
Aim to withdraw about 4% of your invested amount each year to help ensure it lasts over the years. That’s a guideline only; adjust how much you need according to your expenses and way of living while keeping in mind the estimated life expectancy that you’ve based your financial plan on.
Be flexible, too, with the amount you withdraw as it may have to be a bit over the years, depending on your health and other factors. If you incur a significant medical expense, for example, then you might scale back to 3% rather than 4 for a year or two.
While it’s easy to get overwhelmed about investments, dedicated financial advisors like Wealth Management Scottsdale can help you create a plan to make your retirement savings last longer. Enjoy the golden years by looking ahead now for a bright financial future.