For the average American consumer, retiring on 100% of your pre-retirement income is unrealistic at best. More than likely you will need to rely on a combination of retirement savings, any assets and investments that you might have, a pension if you have one and Social Security in order to get by. Whatever your situation happens to be, the 5 Tips below should help you to stretch your retirement dollars as far as possible. Enjoy.
Tip 1: Pay off as much of your debt as possible before you retire. No matter how much money you happen to have in retirement savings, having all of your debts paid off before you retire is probably the number one best task that you can accomplish. Student loans, mortgage payments, car payments and any other debt that you have, especially credit card debt, should be paid off completely if at all possible. If you can’t pay it all, do everything in your power to pay down as much debt as possible before your weekly paychecks stop rolling in.
Tip 2: Sell your large home and purchase a smaller one, or possibly rent. Many retirees hold on to their old, larger home because they want to have the space if family comes to visit (or move back in). If you’re looking at retiring on a limited budget however, the extra costs associated with owning a larger home can quickly eat up any nest egg that you might have put aside. Moving to a smaller home or, even better in some cases, renting an apartment or condominium, will lower your expenses significantly and help you to stretch your retirement budget much further. The only reason to keep a larger home is if other people are living there with you and helping to pay the bills.
Tip 3: Renting your extra space at home. In Tip 2 we suggested that you should only keep your home if there are other people living there and helping you to pay the bills. If you’re really keen on keeping your home, this is definitely the most viable way to do it and not spend a large amount of your retirement income on home expenses. Indeed, if you can find someone that you trust, and who pays their bills on time, to rent out space in your home, you may even be able to pay most of your home’s expenses using that money. You’ll also have someone there to watch over the place if you decide to visit relatives or take a trip, and possibly help you in an emergency situation.
Tip 4: Find part-time work. There are certainly a lot of opportunities for retirees to work these days and, if you’re physically able to do so and need the extra money, finding a part-time job is certainly an option. In fact, since you aren’t worried about your career any longer you can do something that you’ve always wanted to, like work in a flower shop, a bakery or even a marina if you live near the ocean or a large lake.
Tip 5: Retire abroad. Here’s a fact; many Americans are deciding to retire overseas. The advantages to doing this are many, including a much lower cost of living, warmer climates and, in most cases, a higher respect for the elderly. Retiring overseas is a big move of course, and you should do your due diligence and research any area well before making your move but, for the open-minded retiree with a sense of adventure, it’s definitely a viable option.
These 5 Tips should definitely help you to stretch your retirement dollars as far as possible and enable you to live comfortably, or at least more comfortably. Keep in mind that the better you plan for retirement, and the more you save ahead of time, the easier the transition from your working life to your retirement life will be.