Creating a budget is great, but sticking to it is the tricky part. You want to have fun in retirement, but you also want to be sure you're not blowing through your savings too quickly. Many retirees face running out of money, and taking measures to live frugally from the start can help you avoid that situation.
Now that you have a realistic budget sorted out, you'll need to figure out how to live on that monthly income. If you still have high-interest debts when you retire, you're going to want to focus on paying those off as soon as you can. Getting debt off your shoulders can free up money to reinvest or to make your retirement more comfortable.
There are more places to save money than you might think. If your budget is lean, you'll need to cut back anywhere you can. Do you still need a big house? Are you hanging on to more than one vehicle, when you could pare down to one or even none? Once you've cut back on bigger expenses, you can also take a look at smaller items, like your cable and phone bill, to make sure you don't nickel and dime away that monthly budget.
Have you cut back everywhere you can, but it's not enough? You can work part time after retirement age and still get your full Social Security benefits. There's no shame in taking a part-time job, and you might even enjoy the chance to get out of the house and socialize. Many retirees, especially baby boomers, are taking part-time jobs during retirement to earn some extra cash, and they often find that it's a great way to fill their days.
While it is possible to run into money troubles in retirement, if you plan carefully, budget and save, you'll be in much better shape for a comfortable post-workforce lifestyle.
- Guina, Ryan. "10 Retirement Myths." U.S. News & World Report. Nov. 25, 2010. (Jan. 13, 2010)http://finance.yahoo.com/focus-retirement/article/111411/10-retirement-myths?mod=fidelity-buildingwealth&cat=fidelity_2010_building_wealth
- Social Security Administration. "How Work Affects Your Benefits." January 2011. (Jan. 13, 2010)http://ssa.gov/pubs/10069.html
- Updegrave, Walter. "Making $300,000 last a lifetime." CNN Money. Feb. 2, 2010. (Jan. 13, 2010)http://money.cnn.com/2010/02/02/pf/expert/lifetime_income.moneymag/index.htm
- Weston, Liz Pulliam. "7 stupid retirement myths exposed." MSN Money. (Jan. 13, 2010)http://articles.moneycentral.msn.com/RetirementandWills/CreateaPlan/weston-7-stupid-retirement-myths-exposed.aspx
- Weston, Liz Pulliam. "Making your money last in retirement; 5 keys." MSN Money. (Jan. 13, 2010)http://articles.moneycentral.msn.com/RetirementandWills/RetireEarly/MakeYourMoneyLastInRetirement5keys.aspx