As you get closer and closer to retirement, you may be wondering how you can maximize your retirement money to make sure it lasts through your golden years. Here are some ideas to get the most out of your nest egg.
1.Rework Your Budget
When you retire your monthly expenses will be different, so it’s important to adjust your budget to make sure you don’t go through your money too quickly. Make a list of all your current expenses and delete the ones that will go away when you retire. Next, add in the new costs you might have as a retiree, like travel expenses. Now, make a new budget that takes into account the money you’ve saved and the estimated expenses you’ll incur in retirement each month. Give a budgeting app a go to make it easier to organize your expenses, track spending and adjust your budget whenever you need to.
2. Pay Off Your Debts
Getting debt free will reduce your monthly costs and free up additional funds for things you want to do in retirement. Start by creating a plan to eliminate your debt. But be careful with retirement funds. The idea is to pay off your debt without reducing your nest egg. Try looking for ways to make extra cash instead of drawing down your retirement accounts. Consider putting items you don’t need on eBay, having a garage sale, or taking on a part-time job.
3. Keep Working in Retirement
Just because you are retired doesn’t mean you have to stop working. You can supplement your income and reduce the amount you have to cover from your accounts by taking on part-time work. Working will also keep you active when you’re older.
4. Downsize Your Home
When you retire it’s a good idea to consider moving to a smaller place. You probably won’t need to keep the big house that you raised your kids in. A large home will cost you a lot more to maintain and insure, and property taxes are typically higher for big houses. Reduce your monthly costs by reducing the size of your home.
5. Relocate to a Cheaper Location
Along with downsizing your home, consider moving to an area where housing costs and taxes are lower. Taxes on retirement income varies by state. Some states will tax most types and amount of retirement income, but many states also have exemptions for retirement income, private pensions, public pensions, social security and distributions from retirement accounts such as 401(k)s and IRAs. Make sure to do some research on what states, towns and neighborhoods can help you save.
6. Use Your Senior Discounts
As a senior citizen you have a wealth of discounts and specials to take advantage of. Hundreds of retailers will offer you lower prices on dining, shopping, dining, gym memberships, park and event admissions, airfare, hotels, car rentals, internet and more. Make sure to always check for senior rates whenever you shop, dine or travel.