Making Your Retirement Funds Last: 8 Tips for Smarter Spending
When you’re retired and bringing in less income, all the savings you accrued over the years is pointless if you don’t have a smart spending plan. So how do you make sure your retirement nest egg lasts for years to come? These spending tips could help you stay on course:
Pay yourself. In retirement, you may not receive a steady paycheck, but you still need to set up a system of paying yourself each month. Consider how much you’ve saved and how long you need to make it last, and base your monthly “payment” on an appropriate amount to draw down from your retirement portfolio. There are many online calculators that can help you determine a reasonable amount.
Simplify. The fewer accounts and recurring expenses you have, the easier it will be to manage your spending. If you have multiple credit cards, you may want to keep one and use it for all your spending. That could even help you rack up rewards such as airline miles, or cash-back rebates. You may also want to cut down to just one checking account and one savings account to better track your finances.
Keep an eye on your money. Today’s technology makes it easier than ever to oversee your spending. Programs like Mint.com help you plan, build and allocate a budget so you can see where every penny goes. Many banks and financial institutions also offer easy-to-use online budgeting tools for their customers. Inquire at your local branch.
Be frugal (sometimes). Because retirees tend to have more free time, you can take your time with planning for and making smarter purchases. Look for items you need on sale, and pass on the things that aren’t necessary. Ask yourself, is this a “nice to have” or a “need to have?”
Prioritize healthcare. Health insurance should be your top spending priority every year. Make sure you understand all the available options and choose the policy that best meets your needs. By ensuring sufficient coverage at every stage of retirement, you won’t derail your long-term plans when a bill arrives.
Rethink inheritances. You may already have a dollar figure in mind that you want to leave your heirs — but don’t let it limit your lifestyle. If it comes down to taking that trip you wanted to go on, or saving a few extra bucks in your estate, don’t feel guilty about splurging occasionally if you have the money to do so. Your family would rather see you living happily and comfortably now.
Spend, don’t squander. Sometimes it just makes more sense to spend money rather than save it. If you know you need a new roof, why continue to get it repaired every six months, and risk causing expensive property damage? Or if the transmission is going on your older model car, why not cut your losses and purchase a new or “gently used” vehicle? Think of these things in terms of necessities rather than extravagances.
Conquer your fears. In retirement, you may be reluctant to spend in fear of your nest egg fading away. It’s rational to worry about having money for an unexpected medical bill or loss of additional income when a spouse passes away. But it’s not so rational to hoard assets at the expense of your health, safety and enjoyment, or to live in fear and stress if you don’t have to. For homeowners and homebuyers age 62 and older, a reverse mortgage loan can help you eliminate the burden of monthly mortgage payments and free up cash for unexpected expenses, healthcare costs or home improvements. Find out if you’re eligible for this financial option. As part of your loan obligations, you’ll still be responsible for keeping current with property taxes, insurance, maintenance and any homeowners association fees, but a reverse mortgage can give you greater financial flexibility and reduce your monthly expenses.
Spend more, stress less
Retirement is a new phase in life, and by making plans now, you can keep your funds intact, while bringing home less. Reverse Mortgage Funding LLC (RMF) can help you or your loved ones prepare for a more comfortable future. Call 888-277-1567 for a convenient phone conversation with an experienced reverse mortgage specialist who will explain how it works and answer all your questions.
This information is intended for those who are interested in financial education. This information is provided for convenience only, and RMF make no warranties concerning the accuracy or completeness of any of the information. Information is subject to change without notice, and RMF is under no obligation to provide updated information. Materials or statements made by a third party and located or posted on the Site are those of the third party and do not necessarily reflect the official policy or position of RMF. This is not financial, tax, compliance or legal advice and should not be taken or relied upon as such. Each individual should consult with his/her financial, tax, or legal professional. All mortgage origination services are provided by Reverse Mortgage Funding LLC, a state licensed mortgage lender, which is licensed or otherwise exempt from state licensing in the states in which it originates mortgage loans.