Living on a fixed income during retirement can be a challenge for many seniors. Your level of comfort will depend on your pension and how much money you’ve saved up until now, but it’s important to realize that you are still in control. The way you choose to spend and manage your money can make a huge difference, so here are a few ways to plan a better retirement.
The very first thing you have to do is make a budget for your retirement. It’s not particularly fun, of course, but it’s also not nearly as complicated as it initially seems. Sapling.com has an excellent step-by-step guide to creating a budget as a senior citizen, which will have you in control of your finances within a couple of hours.
Not surprisingly, healthcare is likely to be one of your biggest costs. Original Medicare is usually cheaper, in general, but it is a good idea to spend a bit more money on a Medicare Advantage plan that has better coverage to see a savings long term. Many of these alternative plans cover things like dental, vision, hearing, and expanded prescriptions, which Original Medicare does not cover.
Between parking, repairs, insurance, and gas, the cost of driving can really add up. You can save up to $5,000 a year by going carless, which is perfectly viable if you live in a city with good public transport infrastructure. This is also considerably safer than driving and good for the environment, two other clear benefits. If you’re just not ready to stop driving, you can still find ways to save. Review your auto policy to see if you can get cheaper premiums by switching to a new provider and comparing rates. Some may even offer discounts for safe driving, lower mileage and a clean driving record. You can also add savings on gas by signing up for reward programs.
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You have to pay tax on retirement plan withdrawals, so it is useful to be careful with these. According to TaxAct, ways to minimize taxes include prioritizing Roth plan withdrawals (while still taking out the minimum distributions from your IRA or other plans) and timing your withdrawals so your income remains relatively steady year-on-year.ned your shop, or added a new product or service? Don't keep it to yourself, let folks know.
The senior discount is one of the biggest perks of being older: use it! If you need some inspiration, this massive list contains 123 businesses that offer senior discounts, including both AARP discounts and others. Not sure if a business does a discount? It always pays to ask!
There are loads of small ways to save on the things you love to do. Use your local library instead of buying books, go to matinees, or attend to free galleries. One area you can save a lot on is cable, even if you want to continue watching live TV. According to CNET, the best live TV service for cord-cutter savings is SlingTV, which starts at $25 a month.
During your next spring cleaning adventure, look out for items that you could sell online to make a little bit of extra cash. However, don’t just look at antiques and vintage clothes — there are plenty of common items that can fetch some money online, including vintage comic books and magazines, old stereo equipment, vinyl records, and unused small appliances. It may not make you rich, but it could help you pay for a nice little retirement vacation.
“Side hustles” are freelance jobs that people usually do in addition to a full-time job, but there is no reason you can’t bring the spirit of the side hustle into retirement. You could become a freelance writer on a topic you are knowledgeable about, sell your crafts online, or take customer service calls at home - just pick something you genuinely enjoy. According to the Balance, those who earn Social Security benefits should aim to make less than $17,040; more than that and you may lose out on your benefits.
Everyone, regardless of their income, should be able to enjoy their retirement. Your golden years don’t have to be about penny-pinching and giving up the things you love. As long as you stay on top of your budget and know your spending limits, you can have the retirement you have always wanted without being scared of running out of money.
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