4 Ways to Get the Most out of Your Retirement Budget

As medical technology advances, society becomes safer and health knowledge becomes more mainstream, the life expectancy of humans tends to increase. In 1950, the average lifespan was 68 years. Today, that figure has risen to 78. While people are excited about living longer, quality of life is also an important part of retiring comfortably. Finding ways to stretch your retirement budget will allow you to retire at a normal age without having to sacrifice the hobbies and adventures you enjoy. Here are 4 ways to get the most out of your retirement budget:

  1. Create a Financial Strategy

Getting the most out of your retirement starts with knowing the limits of your finances. Start by breaking down your current annual expenses and how those will change as the years progress. For example, each year your expenses will grow roughly 3% due to inflation alone. Although you may pay off a mortgage, or save money on business clothes and transportation, the cost of medicine and treatment may replace those expenses. Mapping out your financial obligations year by year will help you determine your financial readiness and how much flexibility you have.

Once you have a budget, every decision you make can be justified by working within the confines of that budget. For example, you can fund a more luxurious lifestyle by downsizing your home, or moving to a more tax friendly region. If you want to spend a particular year traveling, you can eschew another vice such as eating at restaurants for that specific year. There are plenty of creative ways to do what you want without having to blow up your initial projections by tacking on an additional expense.

  1. Diversify Your Portfolio

Just as inflation can eat into your retirement portfolio, earning interest can replenish your coffers. The problem is that many high interest products come with the caveat of increased risk, something older investors are generally less likely to tolerate. However, many financial experts are shifting away from the traditional model and are recommending a more diverse model of risk for their retired customers. As much of your nest egg is not intended to be utilized for decades, there is no reason that a small portion of your funds can’t be invested in higher risk products, if you are willing to ride out the occasional bear market.

  1. Determine Your Strategy for Social Security and Pension Payments

The government allows you to take out Social Security benefits starting at age 62. However, doing so will permanently reduce the amount of your benefits. This amounts to a 25 to 30 percent drop in benefits as opposed to waiting until age 66. On the other hand, if you have no other income, or suffer from health issues, it may be wiser to take a reduced check now than wait for a bigger check down the line.

Another decision many workers must consider is whether to take their pension via a lump sum or an annuity payment. As the advantages vary depending on your personal finances, it is best to consult a financial planner about which choice is right for you. Traditional annuities have the advantage of guaranteeing a steady income throughout the life of you and your spouse, whereas a lump sum provides more flexibility and purchasing power.

  1. Start Slow

The first five years are the most critical when it comes to retirement. Unfortunately, it is common for many couples to overextend themselves during these years, depleting their savings and compromising their ability to spend in the future. Being conservative early in your retirement has two advantages. First, it allows the bulk of your nest egg to earn interest for another five years. Second, it gives you a realistic portrait of how sustainable your budget is over the breadth of your retirement. From there you can gradually take a more aggressive approach and spend your retirement without worry of outliving it.

Carl Edwards writes for EquityRelease.net covering a wide range of retirement finance topics.

5 Retirement Planning Myths You Should Be Aware Of

Retirement planning is difficult for everyone. It is even more difficult if you don’t plan accordingly or you lack the right information. Unless you are fabulously wealthy, there is no sure-fire plan that works perfectly. However, you can make your retirement planning a lot easier by avoiding these common myths.

You’ll Have Less Expenses

Even if you pay off your home and cars by the time you retire, that doesn’t necessarily mean that you’ll spend less money comparatively speaking. Remember, you’ll also likely be living on less income than you earned while you were working. So, you may have fewer bills, but you are also likely to have less extra money to deal unexpected expenses. Things like home and car repairs are inevitable, so it’s a good idea to have some kind of financial cushion.

You Can Relocate

Many retirees have a dream that they’ll sell their home and relocate to an area where the cost of living is lower and/or the climate is better. You can’t possibly predict what the housing market will be like when you retire. You may get far less for your house than you anticipated or the kind of home you want in your new location may be beyond your means. Another problem is that retirees who move away often stretch their budgets frequently traveling home to see friends and family.

Medicare Will Help

Medicare coverage changes on a yearly basis. It’s inevitable that your health care costs will go up as you age and you can’t count on the fact that Medicare will cover everything. Even now, there are routine things like eye exams that Medicare doesn’t cover. There are also many expensive prescription drugs that Medicare doesn’t pay for as well.

There is No Perfect Number

No matter how good your financial advisor is, there’s no guarantee that he or she will be able to help you predict the exact amount of you money you’ll need to live to a certain age. For one thing, financial advisors can’t predict inflation. Secondly, people often underestimate how much money they actually spend. The best idea is to save as much for retirement as you can possibly afford.

It Can Wait

Many people put off retirement planning because they don’t think they’ll live that long or they feel like they need the money more now than they will later. This is a slippery slope. The earlier you start planning for your retirement, the more you’ll be able to enjoy your golden years. Experts universally agree that the later you wait to start saving for retirement, the more likely it is that you’ll encounter serious financial difficulties when you get older.

The best plan for saving for your retirement is to start early and save as much as you can. There’s no way to predict the future. Even if you have to make modest cutbacks in your budget now, it will be worth it to know that you’ll have some security when you get older and have less earning potential.



About the Author: Tony Smith is a full-time writer with a great understanding of the need for early retirement planning. He enjoys writing about personal finance, credit repair, and tips for getting bad credit loans for those with poor financial histories.

5 Things To Help You Learn How To Make Money From Home

Do you want to go on a vacation, pay off your car, or buy a new cell phone, yet are living paycheck to paycheck? Well don’t despair here are 9 things you can do to make money from home.

  1. Craigslist
    This is one awesome service that you can use for free to offer products and service to other people. You can list little things you have made like cabinets, furniture, or even a custom vehicle build. Or you could offer piano lessons.
  2. Websites rule
    The method to make the most money from home is to use the internet and set up a website. With it you can make money from home and steadily increase the income month to month, year to year. You have complete control over how to build it, how to market it, what to make it about, how many you have even. There is no limit to what you can do or how to make money from home with websites.
  3. Hobbies
    The things you love to do most are the things that will help you make the best business. Or rather a business built on what you love will go much farther than one built just on making money. The reason for this is that others are turned off by money hungry people, and attracted to those that genuinely seem to be loving what they are doing.
  4. Advertisements for your car
    There are lots of companies that advertise not only on tv but on cars as well. They will pay you to have one placed on different areas of your vehicle. The bigger it is the more you can earn.

  5. Clear the clutter with eBay
    Get rid of all that you no longer have a use for on eBay and you could be the next millionaire. Well thats if you have an old baseball card collection that your grandfather left you. Even if that doesn’t happen at least you will make a few extra bucks and if you get good make a business out of it.

Get your money from home by taking action right now and select one idea from this list. Work on it every day for the next year. If you do I guarantee you will have learned how to make money from home.

  • Internet Marketing Affiliate Programs – How to Earn Money From Home (cash-bandit.com)