Powerful Financial Tips To Help Make Your Retirement Savings Last Longer
Retirement is a time to enjoy the fruitfulness of all your labour across the years. With all the hard work out of the way, you can sit back, relax and enjoy living off your retirement savings. While this works well for some people, others struggle to make their retirement savings last which can leave them struggling financially. If you’re concerned about your savings not lasting long enough, here’s some powerful financial tips to help make your retirement savings last longer.
Tips To Using Your Savings Wisely
1.Analyse Your Spending
Some people think that when it comes to retirement they can do what they want and spend what they want without any consequences. Unfortunately for many this isn’t true. When you’re living off your savings you need to be aware of what you’re spending and how much you’re living off. To help figure out spending vs savings you can consider a few things:
- Work out how many years you’re looking to live off the retirement savings.
- Calculate your current monthly spending habits and times that by the amount of years you need to live from your savings. For example: 10 years / $1000 per month: $12,000/year x 10 years = $120,000. In this example if you spend $1000 per month on luxury items plus normal bills you’ll need up to $120,000 in your retirement savings.
If you’ve worked out that you don’t have enough money to live off for the set amount of years you’re hoping too, then you may need to look into what you’re spending your money on. If you’re purchasing items that are really dipping into your savings, it might be essential to ask yourself, do you really need these items or are you just wanting them? While you don’t have to go complete budget on everything, it’s still important to analyse your spending to make sure you’re not buying items that aren’t essential or that are blowing your monthly budget.
2. Ease Into Retirement
If you haven’t fully quit your job yet, then you may like to look into slowly easing into retirement. What this means is slowing your career down, but still working part time to help bring in a little bit of money from time to time to help prop up some of the bills. In doing this it not only helps you to get a feel for your retirement, but it also helps to lengthen out your savings further by not having to fall back on your savings as much, like what you would if you completely cut your career off. While this may not be for everyone, it’s definitely something to think about.
3. Use Cash Where Possible
While it’s convenient to swipe your credit card every chance you get to pay for items, this can lead to your bank account incurring fees. While the fees may be up to $2 per transaction depending on the bank and where you’re using your card, over time it can actually cut a good percentage into your retirement savings. For example: Say each time you make a card transaction you’re hit with a $2 fee (or less). Now say you have made 5 different card purchases over a week.
If you calculate a $2 fee for each purchase, you’re already down $10 for the week out of your savings. Now if you do this every week; 52 weeks x $10 = $520 per year. If you work this out over a 5-year period, you’re losing $2600 out of your retirement savings which could be used for something else. When making one transaction to withdraw your money and using cash to pay for things, you would almost halve the amount in fees per year which can help your savings to go further in the long term.
4. Keep Up To Date With Inflation Of Prices
As the world keeps turning, you’ll find that the prices of fees and other everyday expenses also continue to rise. It’s important to keep up with inflation of prices, especially with fees, and work on ways you can get around this. If you find fees have gone up on your retirement account, don’t be afraid to compare other banks and account options for cheaper solutions. This goes with everyday expenses and utilities as well. You have the ability to change and compare businesses and what you buy. If you find something is too expensive, maybe look into other options that are cheaper. This can help to stretch your finances out in your retirement years.
Retirement should be an enjoyable time and not a time to stress about money. If you take these tips into consideration, you have the chance to really make your retirement savings go further over time. Are you ready to make your savings go for longer?
Sarah Porter is a money-savvy writer and mum of two based in Manchester, UK. She is the Brand and Marketing Manager at the UK loan website oinkmoney.com, as well as the founder of a well-known money-saving website. Sarah is originally from Edinburgh where she studied Business and later worked in finance for a FTSE 100 company. She left her career in finance to pursue her passion for writing, a move