Baby boomers can expect their retirement years to last for 20 years or more, making it important that the money they saved will last. While people are spending more time in retirement, many also have insufficient retirement savings to help them remain comfortable. Here are some simple steps you can take to help make the retirement dollars stretch.
Move to an area with a lower cost of living
If you live in an area with a high cost of living such as the East or West Coasts or in large cities, moving to an area with a lower cost of living can help you to save substantial amounts of money each month. For example, San Marcos, Texas has a much lower cost of living than the average city in the U.S. Choosing to purchase a home in a 55+ community in a lower cost area can help you to save thousands each year on housing, food, entertainment and other things.
Downsize your lifestyle
If you do not have substantial savings, you might want to consider downsizing your lifestyle. In addition to moving to a lower cost of living area, you’ll want to choose a home that isn’t too large for your needs. Also consider eating in more frequently instead of heading to your favorite restaurant. When it comes time to replace your car, think about purchasing a used vehicle rather than a new one. Small lifestyle changes such as these can add up quickly, allowing your dollars to stretch much further each month.
Keep track of your investment fees
In order to continue stretching your income in retirement, you will likely want to continue investing your money. However, you should be aware of the investment fees that might be associated with different types of investments. Investment fees can potentially reduce the amount of retirement savings that you have by thousands of dollars. Ideally, you should keep your expense ratio to no more than one percent.
Wait to draw Social Security
Instead of drawing Social Security early, you might be better served by delaying when you begin drawing it past your retirement age. In the long run, waiting to draw Social Security can provide you with more money. For each year that you delay drawing Social Security up to age 70, you will enjoy an eight percent increase in the benefits you receive.Since people are living much longer, stretching your money to last throughout your retirement years is important. When you employ these simple hacks, you can continue to live comfortably during your golden years without having to worry about your finances.