How To Save Money In Retirement

Saving Money In Retirement

First Published Date : October 28, 2010 ADawnJournal.com

As you get older, you are going to want to think of ways that you can save money in retirement. Saving money is very important because you will not have as much of an income coming in and you need to prepare for a lot of costs, including medical. While you may have a lot of money in the bank, that does not mean you should spend it without thinking.

So, how can you save money in your retirement so your savings go a long way?

1.   First, you need to determine how much money you need each year. This should include your insurance costs, travel costs and the cost of day-to-day activities.

2.   Calculate how much money you have coming in from investments, your pension, your tax-deferred income like IRAs and more. You will need an income that equals about 75 per cent of your current pay, which means that if you made $100,000 a year, then you will need $50,000 to $75,000 a year.

3.   Keep in mind the rise of inflation, which can vary between one to five per cent per year. The money you have now will not go as long of a way as it will in 20 years.

4.   Talk with a financial planner about how much money you are going to need and ways that you can make your retirement savings grow over time. The financial planner will cost you money, but it will also earn you and save you money.

5.   Cut back on anything you do not need to spend money on. Go through your expenses and determine what you can cut back on. This is very important to do because you want to save money anywhere you can. If you do not need a second car in retirement, then sell the car and put the money into your retirement funds. Do you need the house you have or can you move to s smaller one?

6.   You should also determine ways that you can bring extra money in. This does not include your investments or pension, but doing hobbies that will earn you money. If you enjoy working with clay, wood or stone, then you can make things that you can sell at a market. It is something you can do to fill your spare time, which you have a lot of, and you are not working a full time job.

When you want to save money in retirement, you need to determine what you can cut back on, where you can make money and how you are going to live. Retirement is not like the rest of your life when you are dealing with money coming in at a regular basis. You do have money coming in, but it will not be as much money as you are used to, and that means you have to make adjustments in your life to meet that new requirement within your life. Retirement can be fun, you just need to know how to manage it properly.