One of the biggest concerns we hear about retirement is running out of money. This is understandable because we don’t know how long we will live, what our future costs might be or what kind of returns we will get on our investments. Let’s talk about a couple of things you could do to help stretch your retirement dollars.
Reduce your ‘Must Have’ Expenses
One great way to reduce monthly expenses is to downsize to a smaller home. This could help to not only eliminate a mortgage or make the monthly payment smaller, but shrink monthly costs such as utilities, property taxes, and insurance. Eliminating debt before retirement is another great way to reduce expenses in retirement. According to AAA, getting rid of a car could save you nearly $9,000 a year, which is the average cost of owning a car.1
A study done by the National Bureau of Economic Research found that delaying the start date of your retirement from age 62 to age 68 could raise the annual sustainable standard of living by 33%. Even if you can no longer work full-time, part-time could help to eliminate withdrawals from your retirement savings.2
Maximize your Social Security
Knowing how to maximize your Social Security is important, since those checks will most likely be a major source of income during retirement. By delaying your benefits, you could see an increase of roughly 7% each year you delay between the earliest claiming age (62), and your full retirement age (currently 66 – raising to age 67 for people born in 1960 or later). Social Security is based on a worker’s 35 highest-earning years, meaning you may also boost your benefits by working longer if you are able to replace one of your lower-paid years with a higher-paid one..3 Filing for Social Security is not a one size fits all event, there are many different calculations that go into it. Be sure that you are working with someone who can help you make the best decision for you.
Get Good Tax Advice
Your tax situation could become more complicated in retirement, especially if you are a good saver. You could be thrown into a higher tax bracket by your Required Minimum Distributions from your retirement funds (these typically start at age 70 1/2). Having a higher income could also cause your Social Security to be taxable and even raise your Medicare premiums.4
All of this can be overwhelming as there is so much that goes in to planning your retirement. Having a financial planner who looks at all aspects of your retirement is a must! We can help ensure your goals in retirement are being met by creating a custom ‘Retirement Road Map’ giving you peace of mind so you can enjoy your retirement.
Give us a call today at 801-465-6990 if you would like to discuss your situation and make sure you are on track for retirement.
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