As you approach retirement, concerns about your funds and how long they will last are valid and quite common among many future retirees. With the increasing rates of healthcare and the questionable health of the economy, the idea of running out of money during retirement can be scary. Fortunately, with proper planning and financial direction, you can stretch your savings to last and significantly decrease your potential of running out of money during retirement. Let’s discuss some considerations for preparing your retirement savings to last and giving yourself peace of mind well into your golden years:
Maximize Social Security Benefits
Collecting social security is an appealing benefit of retirement. By the age of 62, or 66 if you were born in 1955 or after, you can qualify for social security and collect your monthly benefits as you enter the joyful time of retirement. Your benefits are based on your work history for up to 35 years, what you earned, and when you made your retirement claim. There are a few different ways to maximize your social security benefits, and when you make your claim has a lot to do with it. While collecting early may seem appealing, consider waiting on your claim to increase your benefits in the future and extend the longevity of your funds. Claiming too early can reduce your benefits early on and later in your retirement.
Minimize Fixed Expenses
Your fixed expenses typically cover life necessities—things like food and housing and any monthly debts, medical bills, or insurance payments. While fixed costs are usually unavoidable, there are multiple ways to minimize how you contribute to them financially. Setting a recurring monthly budget for necessities such as food is a simple and effective way to do this. To take things a step further, consider your housing options. Downsizing is a great way to minimize your housing expenses and reduce associated costs outside of mortgage (even if your mortgage is paid off), like property taxes, maintenance, and insurance policies. In the event, you’re entering retirement, but still have your mortgage to work on, you can also consider refinancing and potentially lowering your interest rate as you continue to pay your loan.
Budget and Spending Plans
If you have a savings account, you’ve probably dealt with a budget or two before. Budget and savings plans are critical in your retirement planning process. You can cover your fixed expenses in your spending plan while incorporating what you have for extra activities like shopping or travel. You’ll want to base your spending plan on sources of income (social security, part-time work, retirement plans, etc.), and your cost of living as a retiree.
The longevity of your retirement funds is heavily dependent on how well you plan an maximize your efforts.
Securities offered through Kalos Capital, Inc. and Investment Advisory Services offered through Kalos Management, Inc., both at 11525 Park Woods Circle, Alpharetta, GA 30005, (678) 356-1100. Retirement Income Strategies is not an affiliate or subsidiary of Kalos Capital, Inc. or Kalos Management, Inc.