The New Retirement: Small Changes, Big Savings

7770054244_1994acfe15Photo courtesy of Jenn Durfey

Retirees in the new millennium are finding that their golden years are not exactly how they dreamed they would be. The combination of longer lifespans, higher expenses, smaller nest eggs and low returns on investments mean that the multi-decade retirees of this generation will be forced to make some difficult decisions.

That being said, retirement in the present year or upcoming few doesn’t have to mean certain poverty. Seniors who are finding that their retirement savings are coming up short can make some small changes that will add up to big savings and a more stress-free third act.

A multitude of studies regarding finances during retirement predict that the average US employee will end up facing a significant money shortfall each month if they fail to take action to remedy their budget problems.

Because the game of retirement has changed so significantly, current retirees can’t really look back and learn from past generations, and that leaves many people feeling alone and floundering without direction. The result is severely lacking retirement account balances that will simply not cover all of life’s expenses. So what is today’s retiree to do?

Working later in life is one way to boost your Social Security payments when you do officially retire. By delaying collecting on your Social Security for several years, you can significantly increase the amount of benefits you will receive. Although you will have to work longer, it may be worth it in the long run.

Realistically though, many people are forced to leave the workforce earlier than they’d like due to complications of their physical or mental health, or late in life job loss, so it’s important to start looking and thinking beyond the money as soon as possible.

If you’re still at least a few years away from retiring, indulge your inner entrepreneurial spirit and start a business alongside your regular job. Put your passion to work for you and by the time you retire, you will either have a significant savings or be ready to launch a business.

For those of you who’ve already made the leap, either partially or totally into retirement mode, don’t panic. There are some things you can do to salvage your lifestyle, saving yourself from poverty at an older age.

The biggest decision you can make that may bring in a significant amount of money is whether or not to move. Especially if you own your own home and had a (large) family that has now left the nest, downsizing can bring in a lot of money. If you’re living in a home that has rooms that you don’t even go into or use on a daily basis, your home is probably too large, and you could do just fine with a smaller dwelling. Additionally, moving to a smaller home or apartment means lower monthly utility bills and less time and resources spent on upkeep, not to mention lower property taxes. If possible, moving to a less expensive area is also a great way to stretch your dollar during retirement, when you need them to stretch further than ever before.

Other things to analyze include your mode of transportation, especially if you’re paying a hefty car payment each month. It’s possible that you don’t really need two cars past the retirement age, especially if your spouse is also retired. Also, comb through all of your utility bills and determine where some excess spending could be cut. I personally know a woman who, after her husband’s death, changed a few of her bills around from budget plans to getting charged for her actual usage. By foregoing excessive air conditioning and keeping power sucking appliances unplugged, she got her electric bill down by approximately $250.00 per month. That’s just one utility!

As you look forward into your retirement, whether it be far into the future or just around the next bend, remember that small changes really can equal big savings, and you’re definitely going to need it.

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5 Responses to The New Retirement: Small Changes, Big Savings

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