According to reports, 1 in 5 American retirees have no retirement savings at all. This fact might be shocking since most people think of spending their retirement days on vacations and enjoying their free time. Sadly, this is far from the reality for most people. The good thing is that there are ways that you can manage or make the most of whatever cash you were able to save up for your retirement.
This list covers essential money advice for seniors so you can still enjoy your retirement years.
Know where all your money is going
Budgeting is one of the most crucial foundations of financial planning.
A budget plan will help you live on a fixed amount. Budgeting for retirement not only means tracking your expenses and knowing where your money goes. It also means factoring in all your contingencies. Like in any stage of life, you will encounter a curve ball or two (or even more) in your retirement years, and it is crucial to be ready for the unexpected.
Identify your sources of income, including your pensions, government benefits, part-time income, investments, etc. After that, identify fixed and flexible expenses. Now, reconcile both lists and asses if you have enough to cover all your bases.
Do you have some extra money for discretionary expenses such as entertainment, traveling, gifts, a quick coffee with friends, etc.? If your income list falls short compared to your expenses list, you must find ways to cut back on your expenses or look for ways to increase your income.
Look at your spending habits in the past six months; use your bank statement as a reference. If you usually use cash, write down every purchase you can remember. Keep this journal for reference in the future.
Cut lifestyle costs
Cutting your lifestyle costs helps ensure you have enough money for the future.
Take a good look at the things you spend your money on, especially in the past few years. Identify which items you can afford to eliminate. You may have a club membership that you don’t use. Do you eat out too often? Maybe you and your spouse can move somewhere cheaper (a state or city with a lower cost of living). Take note of extravagant purchases and look for ways to save.
Seek out bargains, shop using deal websites, take advantage of senior citizen discounts, and shop using coupons. The more opportunities you can spend less, the more money adds to your savings.
And while driving your car gives you the freedom to go anywhere, gas prices and traffic aren’t getting any better. You might be better off using public transport (if it’s accessible for you, of course). Walking to the bus stop or the next train station is also a great way to exercise and get out in the community to meet old friends and neighbors and see the new sights in your city.
While retirement means more time for vacation, you don’t need to spend a chunk of your retirement savings on your vacations. More often than not, a beautiful holiday destination is within driving range of your city. You might experience an entirely different climate and scenery just a couple of hours away. And when vacationing, try home-sharing services like Airbnb instead of hotel rooms to save big on your vacations.
Be realistic when budgeting. While cutting your expenses is necessary, it should not compromise your comfort and well-being.
With more free time, the cost of entertainment will be higher. Maybe you will find a new hobby. Make sure that your new hobby will not hurt you financially.
When budgeting, make sure you consider your entertainment. It may not be necessary, but it is a nice-to-have, especially when you have all the free time in the world. After all, life should be fun, and you have earned it. Of course, your form of entertainment should fit your budget. Much cheap and free entertainment, such as art fairs, movies in the park, and the public library, is available.
Take advantage of government and nonprofit assistance
There is no shame in looking for and asking for help, especially with your finances. There are multiple government and nonprofit organizations that offer programs intended for seniors. A simple online search in your local area can quickly give you a few options in your city or state.
Manage debt
Another vital aspect you must learn is how to manage your debts. In most cases, it is best to keep debts like home loans, as this will give you the financial flexibility to spend now. A reverse mortgage is also a good option that can help you save even more money.
It’s never too late to learn more about money
Learning something new takes dedication and hard work, and the outcome can be highly rewarding. It can boost your happiness, give you a better sense of purpose, and opens you up for future opportunities to take head-on. This includes financial literacy.
Learning more about your finances leads to better money management, sound investments, and wealth preservation.
You don’t have to enroll in a class or get a degree in economics to do this. Moreover, you don’t need to spend all your time tracking everything happening in the Wall Street Journal either. Just being interested in how investment works and understanding all the risks involved will give you a better chance of a return on investment. The key here is to know how to make money work for you, not the other way around.
Don’t fall victim to scams
Avoid abuses and scams. Seniors are the most common prey of online scammers, so be extra vigilant and be skeptical of telemarketers and people you meet online. They use so many ways to get you to donate money or share your personal information. Some even offer bogus prizes, pretend to be a customer service representative of your bank, from Microsoft, or from other software used on your computer, a family member who needs money, etc. Some even sell fake prescriptions.
Stay as healthy and active
One of the best ways (and probably the easiest) to save money during this time of your life is to stay as healthy as possible. As they say, prevention is better than cure. The more you can avoid getting sick, the more you can enjoy your retirement money and enjoy life.
Eat healthily—do not skimp on healthy food, and choose real whole foods or home-cooked meals over processed and fast food. Take health supplements if necessary.
Exercise moderately. The best exercise for 50 years and up is at least 2.5 hours of moderate-intensity aerobic exercises per week, and at least two sessions of strength-building exercises per week. The former is for your heart and lungs, while the latter is for your muscles and bones.
Never forget your recommended screenings and well visits. Schedule your annual physical checkups. Learn how to manage stress and get plenty of rest.
