You just reached age 65 and said goodbye to everyone at work. You are heading towards what should be the most relaxing and enjoyable time of your life—retirement. You are a little nervous about this transition in your life. You’re probably asking yourself “will my money last as long as I do?”
Being a little bit worried about leaving the workforce is normal. After all, you don’t want to get a few years into retirement just to realize that you won’t have enough cash to get you through your golden years.
Fortunately, there are some things that you can do to ensure that your nest egg will remain steady even when you are no longer collecting a paycheck from work. Following these tips will help you enjoy the wealth that you have accumulated so that you can have a stress-free retirement.
Develop a Budget and Stick to It
It is important to have a budget that aligns with your income and your desired lifestyle. In retirement, overspending can be disastrous. Having a budget and following it will go a long way towards ensuring that your money lasts throughout your retirement. It will help you avoid one of the biggest mistakes that people make in retirement, which is spending too much money too soon. It will also put you in a place where you can make smart choices about the type of retirement lifestyle that you want.
For your recruitment budget, factor in what you spend on housing, vacations, daily living costs and other miscellaneous expenses. Then, gather all information about your income. Compare your expenses to income and adjust your budget as needed.
It is essential that debt is eliminated before retirement to maximize your income. Having debt in retirement will create a catastrophic situation.
Therefore, make sure that you have all debt paid off before retiring. If this isn’t possible, then make it a priority to pay it off. And, whatever you do, don’t go into debt once you have retired. Otherwise, the debt will certainly steal away your golden years.
Don’t Support Adult Children
Maybe your adult son is in trouble after being laid off, or your daughter needs help paying for your grandchild’s education. Whatever the reason, resist bailing your children out after they have reached adulthood.
While it is tough to tell your son or daughter that you cannot help them, it is important not to put your retirement at risk. The problem is that you cannot replace the money that you give to them, while they have the opportunity to keep earning what they need to cover expenses.
Instead of giving money to your children, have a conversation with them. Help them understand that this is the only pool of money that you have, and that it has to last a projected number of years. Encourage them to problem solve their way out of their financial mess.
Wait to Collect Social Security
Social Security alone will not provide enough cash for a comfortable retirement for most people. It should only be used as a last resort. If you choose to collect social security at age 62, it will permanently reduce your payment by approximately 25 percent. Since Social Security payments increase eight percent each year you delay being on it, try to hold off until age 70 to collect.
Focus on Your Health
Just as you carefully preserve your nest egg in retirement, you should also invest in your health. According to Entrepreneur, a couple who retires at age 65 will need approximately $200,000 to cover medical costs during retirement—and that is with Medicare. This number does not include long-term or nursing care. It also does not include over-the-counter medications. So, invest in your body and mind and commit to a healthy lifestyle as you age.
Consider a Part-Time Job
Not only can a part-time job add to your income, but it can also lead to happiness and a sense of purpose. This can be an emotionally fulfilling job that wasn’t an option in your younger years when the pressure to earn was higher. Retirement is a great time to do what you really want. If you find a job you love during your retirement years, it can help preserve your nest egg and provide enjoyment in your daily life.