People are living longer, which means having a well
stocked nest egg is imperative to living your golden years in happiness. More folks
are living well into their 90s, which means having enough cash before you retire is vital to a happy,
Some moves you can make before you retire
include maxing out your 401k, stocking your emergency fund, and protecting your
investments from risk. Once you reach that magical age when you can retire,
here are a few steps you can take to keep the money flowing for years to come.
You might learn a new language for the hack on page 14.
1. Envision what retirement looks like
Create a realistic budget before you ride off into the sunset. You can
use this worksheet to assess your ongoing
and one-time living expenses. Don’t forget to take your age, income, and
savings value, including pensions and investments into consideration, CNN reports.
“To feel reasonably secure that you won’t outlive your savings, I’d
think you’d want to see an estimate of 80% or better that your savings will
last a lifetime,” according to personal finance editor and author Walter
Updegrave. “Generally, if you start with an initial annual withdrawal equal
to 3% to 4% of savings — or $30,000 to $40,000 for a $1 million nest
egg — and then adjust that amount each year for inflation to maintain
purchasing power, you’ll likely come in close to that 80%-or-better target.”
Next: Go smaller.
2. Travel light
Do you still need the big house, three cars, and membership to the
country club? Or could you dump some the trappings of family life and increase
your retirement cushion?
Although your retirement years are meant to be a time to explore and
play, consider eating out less and finding cheap or free ways to have fun.
Next: Go to
your happy place.
3. Identify your happiness
Spend money on what makes you happy and keeps you young, CNN reports.
The American College found that retirees who spent money on travel, social
activities, hobbies, and dining out were the happiest because they remained
socially engaged and active.
track of this can drive costs down.
4. An apple a day…
Reduce medical expenses by maintaining a healthy lifestyle in
retirement, according to Investopedia. While not all illnesses are
preventable, you can reduce your risk by exercising,
limiting your alcohol intake, eat healthy, and being vigilant with preventative
pass up these.
5. Get your discounts
Many groan when they first receive their AARP card and miss the silver
lining. Those over age 50 can save a ton of money by taking advantage of discounts on movies, travel, car rentals, hotels,
retailers, restaurants, and more.
6. Don’t pay investment fees
Investment manager fees can suck the life out of your nest egg,
especially if you are paying more than 1%, according to Investopedia. One way
around this is to search for a lower fee alternative using an app like FeeX.
7. Wait to tap into Social Security
The longer you wait to collect your Social Security benefits the more
cash you’ll ultimately see, Bankrate reports. If you collect at
age 62 your benefits are reduced by 30%. However, if you wait just four more
years, your benefit reduction is only about 6.7%.
Next: Or you
could keep doing this for a while.
8. Keep working
Head into a new career or work part-time to pad your retirement
savings, Kiplinger reports. The longer you can
put money into savings, versus taking it out, the better off you are in
making this move.
9. Retire in a tax friendly state
Some states tax retirees less, according to Kiplinger. This includes lower property
taxes, making withdrawals from tax-deferred retirement programs, and pensions.
Some states that tax retirees less include Wyoming, Alaska, South Dakota, and
Mississippi. States that tax retirees the most include
Minnesota, Connecticut, Kansas, and Vermont.
10. Delay retirement
The median age for retirement is around age 62, but if you can hang on
longer, you can save even more, Bankrate reports. Those who have less than
$200,000 in savings should reconsider retirement. You probably won’t have
enough to cover the next 30 years of retirement taking inflation into
boost your ROI.
11. Perform an investment checkup
Your appetite for risk and market fluctuations are just a few reasons
why you should consider rebalancing your portfolio. A portfolio rebalance
protects you from being more open to risk than you’d like, but also less open
to returns if your investments are too conservative. While some money managers
suggest rebalancing every year, others consider rebalancing every quarter or
month is a good idea, CNN reports.
12. Withdraw money slowly
Withdraw about 4% of your retirement assets each year to maintain a
decent cash flow for about 30 years, according to Time.
for the future.
13. Use this investment strategy
Establish specific buckets of money based on each retirement phase, Time
reports. The first bucket would include risk free investments, like fixed
annuities, that you use during the first 10 years.
Once that bucket dwindles down, the second bucket is waiting which
contains moderate risk investments like government-backed bonds. The third
bucket includes more risky investments, which will likely sit for about 20
years before you need the money.
14. Move overseas
Some retirees are finding that living in a foreign country really stretches
their dollar. Some of the best places for retirees to move include Mexico,
Panama, Ecuador, and Costa Rica, according to AARP.
forget to check this out next year.
15. New tax plan
Tax laws will change in 2018, bringing some benefits to retirees. Some changes
include caps on tax deductions and the elimination of dependent exemptions.
Also, plan on seeing changes in mortgage interest, and medical deductions.
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