Saving for retirement can be a long-fought journey, but once you reach that milestone, a new challenge arises: how to plan your spending. Retirement Daily Editor and Publisher Robert Powell joins Yahoo Finance’s Wealth! to discuss spending strategies for when one finally retires.
Powell notes that an individual’s retirement spending should be based on “how well-funded you are when you enter retirement.” However, he points out that regardless of whether an individual is underfunded or overfunded upon entering retirement, retirees often tend to be more conservative with their spending in the initial few years due to uncertainty about their longevity, referring to this period as “the go-go years.”
Powell recommends two spending approaches to alleviate retirement uncertainty: “the bucket approach,” which involves allocating one to five years’ worth of expenses into “safe accounts,” with the second bucket invested in more volatile assets, and the third bucket allocated to stocks; and the second strategy entails matching “guaranteed sources of income against essential expenses” and utilizing your 401(k) for discretionary expenses.
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Retirement is a time to relax and enjoy the fruits of your labor. But for many retirees, it can also be a time of financial uncertainty. With rising healthcare costs and inflation, it’s important to find ways to stretch your retirement savings and ensure they last as long as possible. One key to ensuring financial stability in retirement is spending wisely. Here are some tips on how to spend wisely in retirement to prolong your savings:
1. Create a budget: The first step to spending wisely in retirement is to create a budget. Take stock of your monthly expenses and income, and identify areas where you can cut back. By creating and sticking to a budget, you can avoid overspending and ensure that your savings will last longer.
2. Cut unnecessary expenses: Take a closer look at your spending habits and identify any unnecessary expenses. Do you really need that daily latte or monthly subscription service? By cutting back on non-essential expenses, you can free up more money to put towards savings or unexpected expenses.
3. Be mindful of healthcare costs: Healthcare costs can be a major expense in retirement. Make sure you have a good understanding of your healthcare coverage and any out-of-pocket costs you may incur. Consider setting aside a separate fund for healthcare expenses to avoid dipping into your retirement savings.
4. Downsize: If you find that maintaining your current lifestyle is straining your retirement savings, consider downsizing your home or making other cost-saving changes. Moving to a smaller home can lower your housing expenses and free up more money for savings.
5. Be frugal: Embrace a frugal lifestyle in retirement by looking for ways to save money on everyday expenses. Shop sales, use coupons, and take advantage of senior discounts whenever possible. By being mindful of your spending habits, you can make your savings last longer.
6. Monitor your investments: Keep a close eye on your investments and make adjustments as needed. Rebalancing your portfolio and diversifying your investments can help protect your savings and ensure they continue to grow over time.
7. Stay active: Staying active in retirement can have a positive impact on your physical and mental well-being, but it can also help you save money. Consider participating in free or low-cost activities like walking, biking, or volunteering in your community to stay active without breaking the bank.
By following these tips and spending wisely in retirement, you can prolong your savings and enjoy a financially secure retirement. Remember, it’s never too late to start making changes to your spending habits and ensure your savings will last for years to come.
I had initially planned to retire at 62, work part-time, and save money, but the impact of high prices on various goods and services has significantly disrupted my retirement plan. I'm worried about whether those who experienced the 2008 financial crisis had it easier than I currently am. The volatility of the stock market is a concern as my income has decreased, and I fear that I won't be able to contribute as much as before, potentially jeopardizing my retirement savings.
No debt, no mortgage is key you can find a way to make up the rest of expenses
Can you ever be “over funded”? 99.99% of Americans will never have that problem.
There is one project that stands out and it is in early phases. It is Weewu. 10m already raised from institutions and now public have their opportunity
I´m bullish on VRA, Joystream and Weewu. What do you think guys about my picks?
God bless you all, I hope we all get many x returns by the end of the bull run. I am betting in 100 bucks that Weewu will do 150x by the end of 2024.
My top picks for this bull run are Illuvium, Verasity and Weewu.
You forgot to mention Weewu. It will destroy other alts. Still early to ape in.
Check out Weewu, 50x soon!
Unfortunately we don’t know when we die?!
>I have about 5% of my portifolio in AAPL stock, any advice on any other that I can grow my $200 k capital to a million dollars??