Prepare for Your Retirement on a Fixed Income
Updated: May 13
Guest post by Karen Weeks of elderwellness.net
Stretch Your Retirement Income
If you are preparing 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 tips below to protect yourself financially in the years to come.
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. Bank of America guides you through creating a monthly budget and takes you through each task, like collecting your financial statements, listing 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.
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.
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 in the long run. Instead, hold off on claiming them. If you delay receiving your benefits until after the official retirement age, your monthly payments may be hiked up for as long as five years. Social Security payments have also gone up in the past years, with 2019 seeing the biggest rise in benefits in years.
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. This United States government 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.
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