Prepare for Your Retirement on a Fixed Income
Updated: Feb 14
Guest post by Karen Weeks of Elder Wellness
As you are prepare to enter your retirement years, you have much to look forward to. Without the nine-to-five burden, you will have more free time on your hands and can put greater effort into enjoying friends, family, and hobbies that you love. You still need money to maintain your lifestyle, however, and you may be worried that your funds will run dry when you no longer have a fixed income.
This is a common fear: Surveys show that the majority of older persons are concerned that they will run out of cash during their retirement years. Luckily, with a bit of preparation and oversight, you can make sure this doesn’t happen to you.
Follow the 4 tips below to protect yourself financially in the years to come.
Tip 1: Get a Handle on Your Monthly Expenses
If you want to tweak your budget, you need to figure out what your current earning and spending habits look like. Begin by creating a monthly budget. Collect your financial statements, list your expenses, and setting your goals. This allows you to see where your money is going and areas where you can cut down. For instance, if you have a public transportation pass that you pay for but rarely use because you are retired, this is an expense you can likely save on going forward. You can also reconsider “luxury” costs like going out to eat.
Tip 2: Downsize Your Home to a Cheaper Property
If you have a large family home and your kids are long gone, you might consider moving to a smaller property. You can sell the house and use the profits to fund the down payment you will need for a new place. Downsizing also has other benefits for seniors: It means you will spend less money and time on home maintenance. When looking for a new property, you can further focus on finding the perfect real estate for aging in place; for instance, you can opt for a one-story model that nixes the need to climb stairs.
Tip 3: Hold Off on Collecting Social Security
Social Security benefits are designed to keep people afloat after they retire. You might want to cash in on these advantages as soon as possible. If you do this, however, your benefits will be reduced by 25% compared to if you hold off claiming benefits until after the full retirement age of 66. And, if you delay claiming your social security benefits until age 72 you will get an extra 32% monthly income.
Tip 4: Make the Most of Medicare
Health care is one of the most significant costs that older persons have to deal with. You can save significantly in the big picture by switching to a Medicare Advantage plan. The United States Medicare website explains how it's done. Medicare Advantage covers additional fees, such as certain preventive care procedures: For instance, Anthem provides expanded coverage for prescriptions as well as dental and vision services. Since it’s often cheaper to address healthcare problems when they are in their early stages instead of paying for large-scale treatments down the road, this is sure to be a monetary boon.
Follow these tips and you will be on your way to enjoying retirement. They don’t require a lot of energy or time to implement but can spare you the stress of financial worries as you get older. This doesn’t just mean more money in your pocket, it also means peace of mind — which you can’t put a price on. With your financial security in retirement secured, you can focus on other aspects that are essential to happiness in retirement.
If you are 60 or over, have $2 million or more in investments, and think you may need assistance with any of the areas above, the Peak Wealth team is here to help.
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About the Author
Peter Newman is a Chartered Financial Advisor (CFA) and president of Peak Wealth Planning. He works with individuals nationwide that have accumulated wealth through company stock, ESOP shares, real estate, or running a business. Peter applies his unique background to help clients achieve their specific goals and enjoy peace of mind.
Peak Wealth Planning provides concierge services to meet your wealth management needs. Services include: financial planning, investment management, esop diversification, retirement income, insurance, and estate planning advice. Peak Wealth Planning is a fee-based financial advisor based in Champaign, Illinois, and Fraser, Colorado.