Retirement Savings: 4 Ways to Make Your Money Last Longer
People are living longer and longer, and the average length of retirement is going up in turn. So how can you make your retirement savings last?
This post is sponsored by LifeStation, an in-home medical alert company that promotes peace of mind among adults with health and mobility issues and their loved ones.
With advances in medical technology, retirees can expect to live decades after retiring. Strong, vibrant lives are a blessing, but extra years also pose a problem. Retirees have to devise strategies to preserve their nest eggs for as long as possible. There are four practical steps you can take to make your retirement savings last for decades.
- Live independently for as long as possible.
- Find ways to increase your income.
- Maintain your health.
- Socialize on the cheap.
1. Live Independently as Long as Possible
Living on your own improves your chances of financial security throughout retirement. A big reason this is true is that you avoid the cost of assisted care. According to a Genworth Financial study, assisted-living facilities run an average of $3,750 per month. Nursing homes cost more than double that.
By contrast, living independently is much less expensive and provides you with options to make your retirement savings last. For example, people residing in a long-owned family house can take out a reverse mortgage, which opens up a world of financial possibilities for healthy retirees. A reverse mortgage allows you to use equity in your house to pay for living expenses. It can be a great solution when Social Security and retirement income aren’t enough.
The key to living on your own is to maintain your health as long as possible. Illnesses and accidents are the two main reasons retirees lose independence. Each year, 800,000 older adults needed hospitalization as the result of a fall, according to the Centers for Disease Control and Prevention. And in 2015, medical costs for falls totaled more than $50 billion. Removing clutter and other tripping hazards can help you maintain your independence longer.
People facing the prospect of limited mobility may want to consider investing in a medical alert system.
These systems can help you maintain independence longer, and they aren’t too expensive.
Services offered by LifeStation start at just $25.95 a month. With LifeStation, you can push a button to reach a representative. If necessary, help is then sent to your door. Immediate medical attention improves the likelihood of a good health outcome. It also reduces the risk of expensive long-term care following a fall.
2. Find Ways to Increase Your Income
An ideal retirement generally involves some well-deserved rest. Of course, that rest can’t come at the cost of financial security. Many retirees find they need to increase their income during retirement. This doesn’t mean going back to the nine-to-five grind. Instead, many people can increase their income through some savvy planning and meaningful work.
For example, many retirees can reap a huge financial benefit from taking Social Security at age 70 as opposed to age 62. Just how much of a benefit? A person born after 1960 receives a whopping 54 percent more income by waiting until age 70. Withdrawing Social Security later makes a huge difference in preserving your retirement savings.
You might also find ways to make your retirement savings last by taking on some meaningful work. For example, you might return to your former career on a part-time basis as a consultant. Or you might capitalize on a hobby. For example, if you are an amateur naturalist, you could lead paid hikes, or if you’re a person who loves to sew, you could make custom costumes for a local theater. Passionate musicians could earn money by performing for weddings or other social gatherings.
Every dollar you can earn is another dollar that gets to remain inside your nest egg.
3. Maintain Your Health
One of the biggest expenses during retirement is the cost of medical care. A Fidelity health-care cost estimate shows that in 2018 a 65-year-old couple can expect to spend $280,000 on medical expenses during retirement. Reducing this amount isn’t easy. Many medical costs are the inevitable result of aging. Still, taking a proactive approach toward health may lower some of your costs.
The healthiest way to reduce your medical costs is to take preventive care seriously. Don’t neglect your health in the early years of retirement. Instead, get an annual physical and follow your doctor’s recommendations regarding nutrition and lifestyle. Less common forms of preventive care may also pay off. For example, basic strength training and removing tripping hazards can prevent falls. Enrolling in LifeStation’s medical alert system can lower your medical costs if you end up having a medical emergency.
Preventive care costs money up front, but the outcome is likely to be better health. And in the long run, better health should keep more money in your pocket.
4. Socialize on the Cheap
On top of maintaining physical health, retirees have to focus on their social health. This might seem unrelated to your wallet, but it is not. There are medical studies showing that healthy relationships are as important as a healthy diet and exercise.
Of course, retirees on a fixed income should make sure to socialize on a budget. That could mean having your children and grandchildren over for a meal or going to their place to eat. It could also involve free activities such as workout classes or hiking with groups. Even playing cards with friends can help retirees stay healthy.
One way to socialize on the cheap is to meet friends at the gym. Retirees who purchase Medicare Part C qualify for Silver Sneakers, a program that includes free gym services. Of course, you can use the gym for exercise, but you can also meet friends while enjoying a sauna or playing basketball.
Having a good time doesn’t need to be expensive, but it’s critical to a great retirement.
Saving for Retirement and Making Your Nest Egg Last
Financial security is one of the bedrocks of a great retirement. Thankfully, simple things like eating dinner with friends and family, working with your doctor, and opting into LifeStation’s medical alert system can go a long way toward making your nest egg last and maintaining your financial security during retirement.