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Those of us who are approaching retirement age, or have already reached retirement, know that the best time to save for our retirement was when we were in our thirties and forties. However, short of inventing a time machine so we can impress upon our younger selves the necessity of planning for our retirement and saving for it, all we can do is do our best to cope with the situation that we find ourselves in. Fortunately, there are things we can do to make our pension go that much farther. To figure out how much we have to save, and how to actually achieve those savings, we first need to look at what we hope to be doing, now that we've retired. Dreams for our retired life that we had just a few years back may have morphed into something completely different. Take time to reassess what you want out of retired life, then figure out how much money that the new plans will require. You and your spouse may suddenly want to travel, whereas years ago, you thought you'd be happy sitting around the house puttering around in the garden. You may have been filled with the desire to pursue a new hobby. You need to figure out what you want to be doing while living your retired life so you can better plan a way to be able to afford these new dreams. Once your goals have been established, and the financial requirements determined, the hard work begins. The first step is to look at your monthly expenses: electricity, heat and other utilities, phone, internet, television and insurance. Are there ways of reducing those costs? Changing your lightbulbs to LED lights instead of incandescent, or better still, making sure all electrical devices are turned off (not just in sleep mode) when they're not needed. Can you save money if you switch insurance companies? Many insurance companies offer special discounts to customers who insure both their homes and their cars with them. If you use different companies for home insurance and car insurance, you should look into combining the policies into a bundle provided by just one insurance company. Just make sure you get quotes from multiple companies so you can get the best deal possible. You could also save money by combining your television service and internet service into a bundle. You may even be able to add your landline or cell phone service into that bundle for even greater savings. After accomplishing the task of reducing your monthly expenses, you then should create a budget so that you can track how much money you're currently spending on so-called discretionary items, or impulse purchases. As we go through our working life, we get into buying habits that we no longer need. My vice was a pint of chocolate milk from the office cafeteria every morning break. I'd take it to my cubicle and nurse it through lunch. But I don't need a mid-morning chocolate milk. Or a muffin. Or candy bar. Or any of those other vices that I allowed myself while I was working for a living. I'm home now, so those impulse purchases are not needed. I'm sure that you have acquired the same sort of impulse buys: latte, muffin, a magazine. Do that every day, and the dollar value adds up. Build your budget, sharply reduce the amount of needless purchases (you don't have to give all of them up!!), and see just how much money you can save. Don't be surprised if it adds up to $200 or more a month. Another drain on your potential savings is the desire or perceived need to help family members financially when your own financial future is somewhat precarious. It's hard to say no when a family member asks for help in getting a replacement car. And, if you love your grandkids, you'd love to be able to offer to pay for their college expenses. But if you're like most retirees, you can't afford to do it. It's times like these when you have to force yourself to be selfish and say no. If it turns out that you have more than enough money to provide for your retirement, then, perhaps you can help out a little. But you must, beyond any doubt, look towards providing for your own future, before you even consider helping out a family member. It may sound heartless, but it may mean the difference between just eking out an existence, and having a reasonably comfortable life. Yet another way of cutting expenses is to make use of seniors discounts that stores and restaurants typically offer. They may only be ten to twenty percent, but those savings can add up when you can get them for the goods and services that would normally buy anyways. All it takes is to ask the person behind the counter or the server if their establishment offers seniors discounts. It's not a handout. They offer the discounts to retain the business from people such as yourself. And let's face it. Don't you deserve a break? You've earned whatever special treatment you can get by living this long. You've put in the time, reap whatever reward that companies and businesses are freely offering. Sometimes, even after cutting your expenses as much as you can, you still can't manage to save enough money for your projected future needs. It happens to most of us. It's a penalty for not having done more to provide for ourselves back when we were younger. There's nothing that can be done about that (unless you've built that time machine I mentioned earlier. If so, can I borrow it?) When this is the case, when you've saved all that you can save, then you have to considering continuing to work. I know what you're saving. If I have to keep working, then what's the point of retiring. The thing to remember is, with money coming in from Social Security, and from your own retirement savings (and the company pension if you were blessed enough to get one), you won't need to work full-time. Many retail and fast food outlets desperately need people to work part time, especially during the day. The teens they normally hire are at school, and they can't afford to hire any more full time employees -- why not hire seniors who only want to work a couple of hours a day. You can bring in an extra $300 or so each month just by working a few hours a day. If you try, you might get a job doing something that you like doing. And there are health and emotional advantages to being both physically and socially active that would make a part time job doubly beneficial. If you still find yourself short of what you need, after taking advantage of the ideas I've already presented you, you still have one more thing that you can try. That is, to downsize your living arrangements. With all the kids gone, do you really need a three or four bedroom house? Do you really need the three-car garage? For that matter, do you really still need three (or two) cars? By downsizing your living arrangements, you'll end up reducing your monthly expenses even more. You'll avoid future repair and maintenance expenses. And if you managed to pay off your mortgage (and good for you for doing so!), selling and downsizing will release capital that you can put into your retirement account, which will provide you with an annuity for the rest of your lives. Remember, it's not the structure that makes a home, it's the people, the family, that lived in it. If you can find a less expensive place that you love, then that will become home to you. As the old saying goes, Home is where the heart is. As we've seen, it is possible to save for our retirement, even once we've already retired. It's not easy, but it can be and should be done. Build up a reserve now, right away, in case an emergency in the future should arise, or so that you can spend your "sunset years" enjoying life to its fullest. |