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Expenses During Retirement

Tips To Reduce Monthly Expenses During Retirement

Those of us here at Freedom Home Care know how hard you’ve worked to build up your nest egg for your children’s education, emergencies, and your retirement.

So you’ve contributed to your 401K, participated in your company’s pension plan, and put money into an IRA in order to save up for the future.

If you’re currently in retirement or at least thinking about it, there are a few things you may want to consider to ensure the continual grow of your personal wealth.

 

Determine the Right Time to Collect Social Security For You

Decide carefully how and when you plan to collect social security benefits.

If receiving money from social security payments is something you can (literally) afford to put off, it may be in your best interest to do so.   The longer you wait past your full retirement age for a pay-out, the more your monthly benefits will be.

 

Pay Off Your Mortgage

Other smart ways to manage your money if you are considering retirement, is to pay off the mortgage on your home.   If the interest rate on your loan is higher than the return on your retirement fund, this may be your best option.

This way, instead of paying off your mortgage with your retirement dividends, you can save that money and make contributions to your retirement fund.

If paying off your mortgage is not an option, then you may want to consider downsizing to smaller house or apartment if your children are no longer living at home.

 

Balance Your Budget & Then Adjust As Needed

Balancing your income with your expenses is also an important part of saving during retirement. Experts suggest making a list of your monthly expenses like food, electricity, property taxes, gas, medical and leisure.

Because these expenses can change annually due to inflation and cost-of-living increases, you should take this into account doing your budget at the beginning of the year.

Look at the amount you have saved and the years you plan to spend in retirement – and adjust your budget accordingly.

 

Sell A Vehicle

If you have a second car, consider selling one of your vehicles if you no longer plan to drive to and from work every day. This will help cut down on the cost of insurance and the amount you pay monthly in gas.

One car may be all you and your spouse really need.

 

Watch Out for Retirement Penalties

Avoid taking out more than you need from your retirement fund, as well withdrawing too early or too late. There are penalties and fees that plans like social security will assess if you withdraw money too soon without taking out the full amount.

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