Retirement should be the cap on a considerable life well lived. You’ve done your best, worked yourself to the bone in your youth, and now it’s your chance to spend your golden years in peace and relaxation.
Not Enough Savings For Retirement
Unfortunately for a lot of retirees, this can also be the period wherein you discover that all those years of working hard meant nothing, because you failed to save enough money for your retirement. Your social security cheque can barely cover your expenses.
57% of employees in the United States have less than $25,000 in savings and investments – a marked increase from 49% in 2008.
This means that most retirees have to face a financial crisis that they simply aren’t ready for. Their meager savings plus social security cheques would barely be able to keep them afloat, what with the way the cost of living increases on a regular basis.
Smart Tips for Retiring Cheaply
It isn’t a doomsday scenario, however. Retirees can still enjoy their retirement, as long as they follow these tips for retiring with as little expense as possible.
Start Your Own Business
Now before you jump to conclusions, read carefully. When you start your own business as a retiree, do not think of this as too much work or too much stress.
Instead, think of it as monetizing your hobby.
Perhaps you are very interested in woodworking, or knitting or cooking.
These are hobbies you weren’t able to indulge in full time when you still had to work everyday.
But now you can start your own home business by selling your finished products.
If you can knit, it’s very easy to find buyers online. It’s the same thing with woodworking. Turn your hobby into a source of income, without the pressure of the rat race.
Ideally, this is something you ought to start working on before you retire.
You might not be able to save enough to live a lavish lifestyle, but at least save yourself from the burden of paying for your debts through your retirement years.
As much as possible, start by paying off the large ticket items first, like home loans or car loans.
Pay off your student loans and any other debts you might have.
It’s a good idea to settle all these debts before you retire, as they can accumulate quickly and might result in financial difficulties in your retirement years.
Clean Out Your Home
Over the years, it’s very likely that you’ve accumulated a lot of things.
These items are probably still sitting in your garage, attic, or cellar.
Clean these items out and have a garage sale. This will help you begin your retirement years with less baggage, and you get to gain a bit of money from getting rid of things you no longer need.
It’s a simple step towards better financial shape.
Live Below Your Means
It can be difficult, but sometimes retiring means rethinking your lifestyle.
If you used to dine out all the time, this could be your chance to learn how to become a gourmet chef.
You have all the time in the world now, and you can refocus your energy towards things you actually love because you no longer have to be in a nine-to-five job.
As much as you can, try to live a frugal lifestyle and buy only the things that you need. It should be easier since you won’t need work-related expenses like suits or fancy shoes.
Retirement is about readjusting to a new life, and sometimes that means changing your attitude and your lifestyle, too.
Qualify for a Reverse Mortgage
Home mortgages come in traditional and non-traditional forms. If you are a retiree you may qualify for a non-traditional loan known as a reverse mortgage. There are a number of reverse mortgage pros and cons. Among the positive aspects of such a loan are the fact that you can receive the money in set quantities each month to help with living expenses and you will not receive an immediate bill from the lender as with a traditional loan.
You will also have physical security in that you cannot be evicted from your home, but if you ever move, the loan balance will come due right away. Your heirs can choose to pay the balance if you pass away or allow the lender to sell your home, and if there is still a loan balance after the home is sold, the lender will permanently negate it.
Wait Till Your Full Retirement Age To Retire
Retiring before your full retirement age means your benefits could receive a hefty cut. This means losing out on retirement money that should have been yours.
It’s best to avoid retiring before you’re 65 (although to know your full retirement age you have to check the social security website; it’s based on your year of birth).
Even if you’re allowed to cash in your social security checks by the time you’re 62, this won’t give you your full range of benefits and would be a real waste.
Apart from the tips above, there is another option but it’s not everyone’s cup of tea.
Would you ever consider relocating and retiring somewhere else? A lot of retirees are now moving to other parts of the world, especially countries where living expenses are much lower than in North America.
The only problem is that relocating can be difficult, especially if you’re unfamiliar with the culture of your new home.
If you’re considering retiring overseas, it’s a good idea to read up and learn as much as you can about the country you plan to move to in your retirement.
It’s best to be prepared for the new adventures that your retirement can bring.
Some people hope to retire while they are younger, some plan to work well past the age of 65, health permitting. What are your plans for retirement?