5 Tips for Keeping Your Retirement Budget

Optimizing your retirement budget: How do you save money in retirement?

While some lifestyle elements, such as time management and physical challenges, do tend to get a bit easier after retirement, other challenges are unfortunately just beginning. For example, switching to a fixed income can require quite a bit of savvy budgeting in order to ensure your quality of life is not affected by your recent change in employment.

According to USA Today, the average American will spend approximately $987,000 over the remainder of their life after retirement. This number is based on the average annual spending for senior citizens and the average American life expectancy after the age of 65. 

While certain benefits, such as Social Security income and retirement savings can provide a helpful nest egg, this collective amount is rarely enough to provide seniors with more than can be relied on for basic needs. For this reason, it can be extremely important to maintain a healthy retirement budget throughout your golden years, and this occasionally includes plans to cut retirement costs while still finding a way to save money after retirement.

Naturally, pulling this off can seem quite overwhelming, and that’s why MedicareInsurance.com is here to provide you with five great money saving tips for seniors.

5 Money-Saving Tips for Seniors Designed to Help You Maintain a Healthy Retirement Budget

Though the advancement of science and modern medicine has done wondrous things for civilized society, this unfortunately comes with some unforeseen drawbacks. For example, while an increase in life expectancy is very much a good thing for obvious reasons, a greater cost of living must be factored in for the extra years you are likely to enjoy on this planet.

The reality is, we don’t truly know how long we’ll live, what our future expenses will be exactly, and what kind of returns we can expect on things like investments. Luckily, however, there are several ways to boost the odds that your money will last every bit as long as you do following retirement. Here are a few tips that can help you increase the longevity and effectiveness of your retirement budget.

Delay your Social Security

While this may seem counterintuitive on the surface, it is actually quite a smart strategy for those born in 1943 or later. You see, for every year that you delay drawing on your Social Security benefits after you have reached retirement age, your benefits will increase by approximately eight percent until you reach 70 years of age.

If you can somehow find a way to make ends meet following retirement from full-time work for a few extra years, you will automatically save more money each year you delay drawing from your Social Security benefits. Pretty smart, right?

Develop a retirement spending plan

Another element that can really help you make the most of your retirement budget is a flexible and healthy retirement spending plan. This plan requires you to set aside specific amounts of money which is intended to be used only for the purposes for which you have put it aside. 

For example, you can set aside money separately for fun things like travel, dining out, shopping or events, while simultaneously setting aside cash for absolute necessities like housing, utilities, medical care, and groceries.

If you need a little help, a savvy financial planner who has the knowledge and experience to help you allocate your funds accordingly can be a smart resource.

Relocate to a less expensive environment

Did you know that it is quite possible to save literally tens of thousands of dollars per year in cost of living expenses simply by moving to a new city or state? You may be surprised to learn that there is a significant financial disparity between living in an expensive area, like New England, California, or New York, and a generally inexpensive area like the Southern and Mid-Western U.S.

Other factors, like general climate, senior resources, and median senior income can also be considered. You can check out more information about the best (and worst) states to retire right here.

Downsize if possible

Often, the option to downsize can go hand-in-hand with the option to relocate to a less expensive area. To downsize effectively, you can start by considering what you own currently, what you truly need, and what you’d be ok with letting go of.

If you own a relatively large home that you can no longer make full use of, consider selling it, banking the profits, and purchasing a much smaller home or moving to a retirement community or similar facility. 

Downsizing can even extend beyond your physical home, such as selling an extra vehicle, selling large possessions you will no longer have space for, or selling trinkets and clothing you no longer need and banking the money into your savings account.

Switch from Original Medicare to Medicare Advantage

For most American seniors, the highest retirement expense by far is healthcare. This is only natural, as the older we get, the more maintenance our bodies typically require in order to stay healthy. It is for this exact reason that Original Medicare was introduced in the first place.

However, did you know that it is entirely possible to extend your Medicare benefits and gain more comprehensive coverage while saving money in the process? It’s hard to believe, but with the right guidance, it is absolutely possible.

If you are a current recipient of Original Medicare Parts A and B, you may have realized by now that these programs do not always cover every health expenditure you can expect in retirement. By enrolling in Medicare Part C (also known as Medicare Advantage), however, you can save money by lowering your monthly insurance premium and possibly getting additional coverage for needs like dentures, eyeglasses, contacts, hearing aids, and even prescription medications. 

If this option sounds appealing to you, you’ve come to the right place! The experienced and friendly insurance experts at MedicareInsurance.com are ready to help you research and compare your Medicare plan options today. Simply give us a call at (800) 950-0608 to get started!