Going broke in your golden years seems to be a common issue that can last a long time. Unfortunately, according to the Social Security Administration, more than half of all single people, and 20 percent of married people depend on their monthly SSA benefits for 90 percent of their income in retirement. If you’re worried about what your retirement might look like, you may still have time to do something about it.
Downsize
While many financial advisers will suggest implementing small savings tricks into your daily life, like skipping your daily coffee habit or quitting avocado toast, cutting large, unnecessary expenses, like a large mortgage, is a much better place to start. Seniors who already own their home, have a substantial asset at their disposal, says financial blogger, Joseph Hogue, especially if they’ve already paid off their mortgage. If you reside in a big city, consider moving further away from the metropolitan center where housing, groceries, and essential services are typically cheaper. By moving out of the big city, and downsizing your house, you can increase your retirement funds significantly.
Cut Entertainment Spending
If you don’t want to have to move away from your life in the community you’ve come to love, there is an easier way for you to save during retirement. Cut your entertainment spending. Very few people realize the amount of money they spend on entertainment. A recent study determined that people between the ages of 65 and 74 spend nearly $6,000 a year on entertainment. One reason why this gets out of hand is that you’ve gone from just two leisure days while working, to seven during retirement, which gives you more opportunities to spend.
Fortunately, most places have a plethora of free and cheap things for you to do. Rather than spending hundreds on tickets for the latest Broadway play, consider spending the afternoon at your local Shakespeare in the Park. Rather than eating out all the time, maybe you can start to make your way through a new cookbook. Look at getting rid of your cable bill and spend your money on a streaming service like Netflix or Hulu. Just make sure you are using the services that you’ve subscribed to, so you aren’t wasting your money.
Consider Investing in a Self-Directed IRA
Having all of your retirement savings tied up in stocks can end up exposing those close to retirement, as well as those already retired, to too much risk. As you move closer to retirement age, it is essential for you to seek out alternatives that will provide for growth while protecting savings. A self-directed IRA allows you to have complete control over what you invest your money in, and you aren’t limited to investing in mutual funds, stocks or bonds. Self-directed IRAs provide you the opportunity to take advantage of investing your money in alternative assets, like limited partnerships, gold, or real estate.
Budgeting and penny-pinching may not sound like a ton of fun. However, it beats the prospect of going broke during retirement. With just a little pre-planning, you can enjoy the retirement you’ve always dreamed of.
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