SAVING MONEY • April 1, 2021

5 Ways to Avoid Running out of Retirement Money

By Robert Wilson | LearnSaving

Retiring from work is a wonderful feeling, you’ve earned well and worked hard, and now it is time to reap your rewards. It might seem easy to get carried away in the start, and not totally keep track of finances. And before you know it, you find yourself with less than you started out and you are not quite sure how your expenses went up so much. Managing money during retirement is difficult, but not impossible. With some careful strategies and some monitoring, you can easily ensure that your money lasts a lifetime.

Here are a few tips:

1. Evaluate your current situation

The first step to any kind of financial security is to evaluate your current sources of income. This includes your current account balance, savings account, investments, and any other passive income stream you can think of. Add up this total. Then start calculating your averages on fixed costs such as rent/mortgage, bills, groceries, etc. subtract this total, and you now have your “fun money” for variables such as dinners out, trips, etc. This gives you a baseline on budgets, and how much you need per month to be comfortable.

2. Rethink your investment strategy

As you get older, your investment strategy needs to be rooted in stability rather than risk. Instead of going for high-reward, high-risk investment strategies, consider switching gears. You should be looking for options that pay you stable dividends like growth funds or dividend stocks, even the overall amount is a bit lower. If you do not have a financial advisor, this might be the team to seek one out. You do not need a very expensive one, you can work with your local senior center and resources to see if you can at least one free initial consulting session, and shop around different financial advice providers to see who fits best.

3. Look into different insurance and medical options

One of the biggest costs as you age tends to be medication, medical bills, and other health-related issues. If you find that your bills are a bit out of hand, or that you can’t afford prescriptions as easily as you were able to, it might be time to research other options. Private insurance versus options such as Medicare is one option, but what about care homes and expenses like those? You can look into long-term care insurance as an option for costs that aren’t covered by most public health insurance plan. Either way, again, work with your local senior center and resources to help you identify ways to bring down healthcare costs with sacrificing your quality of life.

4. Consider getting a part-time job

If you find yourself running through your nest egg a little faster than you would like, why not replenish it a bit? For many, a part-time job can be a good compromise between enjoying retirement while still having some source of income. Lots of retail chains such as Walmart and Costco offer senior jobs such as hosts and greeters, and there might be other options in the community as well. Poke around local shops to see if they might need an extra hand, or if you can offer some sort of service such as consulting depending on your past experience.

5. Keep an eye on your money

This might sound a little too simple but it bears some discussion. Money does not last forever, and it might get easy to get carried away and not keep track of your spending. You will find that you might be burning through faster without even really realizing, and it will be harder to clean up that damage. Make it a point to look at your accounts at least once in a few months, and make sure everything is in order. Are you on track for the budget that you had initially set? Are your returns still coming in the same amount or are you noticing some discrepancies? Catching these issues early on will help you be more proactive in your retirement saving strategies rather than having to be defensive. These are just some tips to help you start thinking about how to plan for retirement and live the life you want without having to make severe financial cutbacks. Evaluate your current lifestyle to see where you can compromise on costs and how best to bring these down. Having a good monthly average and stable costs and returns will help you better plan for the future and ensure you have enough savings to live a comfortable lifestyle.