Saving for retirement is important, but many retirees forget about saving during retirement, which can be a big mistake. Approximately 42 percent of Americans are at a high risk of retiring broke and being forced back into the workforce, according to a GOBankingRates report. Longer life expectancies, poor planning, unexpected expenses in retirement, and more can quickly eat through your savings. Jan Gleisner, financial advisor, explains how you can keep saving after retirement to make your money last.
Downsize Your Home
Moving can be stressful, but downsizing to a smaller home could save you money every month throughout retirement. Downsizing from a larger single-family home to a townhouse or even a smaller home may save you money on your mortgage payment. You will likely save on property taxes, utilities, homeowners insurance, yard maintenance, housekeeping, and more. Just remember to do the math to make sure downsizing is a wise financial move. Consider all the costs of moving, including getting a new mortgage (if applicable), moving expenses, and whether your utilities, home maintenance, and property taxes will change.
Consider Long-Term Care Insurance
During retirement, one of your biggest expenses will be medical bills, which could eat up a progressively larger share of your income as you get older. Health conditions can be a major threat to retirement savings, even with Medicare. On average, staying in a semi-private nursing home room can cost about $72,000 per year, and most long-term care is not covered by Medicare. Long-term care insurance is a specialized form of coverage that pays for all types of care, including home care, assisted living, and nursing home care. While long-term care insurance isn’t cheap, it is often money well spent. Almost 70 percent of seniors need some type of long-term care at some point. Buying a policy early in retirement can protect your nest egg later.
Reinvest Extra Income
Many retirees have more income than they need, especially in the middle of retirement before medical expenses begin to increase. If you take a part-time job or your retirement income exceeds your expenses, investing the money with a brokerage account could boost your savings and help you overcome inflation. U.S. savings bonds are also popular for retirement savings because they cannot decrease in value.
Look for Travel Deals
For many people, traveling during retirement is a major goal. Many retirees spend more money than they expect on long-deferred travel. To offset the high cost of traveling, consider non-traditional travel deals that can be just as fun while saving you thousands. For example, you may want to sign up for a tax-deductible travel volunteer program. As long as you meet IRS guidelines, you can write off the trip and still enjoy popular travel destinations. You can also deduct your costs if you travel in the U.S. and volunteer for a nonprofit like Habitat for Humanity.
If you’re looking for additional tips for saving money during retirement, get in touch with a trusted financial advisor. San Diego retirees can contact Jan Gleisner today to start planning their finances properly.