Make Your Savings Last By Planning Your Retirement Right
Many people plan on enjoying the serenity of retirement after a lifetime of hard work. However, retirement expectations may come up short, or clash with reality, because of misinformed perceptions. The retirement years are the “advanced age,” chapters in the journey of life, and require you to properly plan your retirement savings. Here’s how.
Calculating Your Retirement Costs Is Crucial
Retirement is all about calculating how much money you will need to live comfortably throughout retirement. It’s best to begin saving for retirement while in your 20s and 30’s. If you want to save a million dollars by retirement age, you’ll need to save $60 a month, or more, while working in your 20s.
If you wait until you are 55 to begin saving for a million-dollar retirement fund, you’ll need to save at least $4,700 a month. It pays to plan ahead. About 42% of people have less than $10,000 saved for retirement. However, even if you do save a million dollars for retirement, you want to make sure it lasts throughout retirement.
Prepare for Standard of Living Expenses
Taxes and retirement fund fees can take out a good chunk of your savings. The average cost of health care maintenance throughout retirement is $280,000. It may take an annual expenditure of $30,000 to $40,000 a year to pay for your post-retirement standard of living costs. Social security benefits barely pay over $10,000 a year.
It’s important to calculate how to make your retirement funds last throughout retirement. As you begin planning your retirement, you should also begin planning where you will live in retirement. Research cities and countries with low standards of living expenses. Make your retirement funds stretch as long as possible.
If you are planning to move somewhere to make your retirement savings stretch, then downsizing is where you should start first. Sell your home. Itemize and sell the belongings you don’t plan to keep on online auction sites. After all, do you really want to pay for the shipping costs to move everything you own? Learn to live frugally and below your means. Additionally, selling your home and possessions will add more income to your retirement savings.
Explore Cities to Retire on $33K to $37K a Year
The key to retiring successfully is making funds last throughout the decades of retirement life. You may need to expend anywhere between $30,000 to $40,000 annually to pay standard of living expenses. Here is a list of 13 cities where you can live comfortably on anywhere between $33,000 to $37,000 a year.
• Birmingham, Alabama – $33,200
• Detroit, Michigan – $33,300
• Jackson, Mississippi – $33,700
• Memphis, Tennessee – $33,800
• Augusta, Georgia – $35,700
• Cleveland, Ohio – $36,000
• Montgomery, Alabama – $37,000
• Fort Wayne, Indiana – $37,000
• Knoxville, Tennessee – $37,200
• Columbus, Georgia – $37,300
• Rochester, New York – $37,600
• Shreveport, Louisiana – $37,700
• Des Moines, Iowa – $37,800
It Pays To Plan Your Retirement Savings Early
Retirement is about maintaining financial independence after retirement age. You gain senior citizen status after the age of 65, although people retire at age 62. There is no set retirement age. So, start planning for retirement, and where you will live out your retirement, at an early age. It could mean the difference between living comfortably for decades post-retirement or returning to the workforce.
Are you planning your retirement? Let us know in the comments below!
Allen Francis is a full-time writer, prolific comic book investor and author of The Casual’s Guide: Why You Should Get Into Comic Book Investing. Allen holds a BA degree from Marymount Manhattan College. Before becoming a writer Allen was an academic advisor, librarian, and college adjunct for many years. Allen is an advocate of best personal financial practices including saving and investing in your own small business.