100 Ways To Live a Rich Life in Retirement — Without Spending All of Your Savings
100 Ways To Live a Rich Life in Retirement — Without Spending All of Your Savings
Preston Hartwick Tue, June 25, 2024
You may have more free time when you retire, but retirement certainly isn’t free.
Around half of retirees report that their overall spending is higher than they anticipated, according to the Employee Benefit Research Institute. At the same time, the top concern of retirees is that the increased cost of living is making it harder to save money.
Ideally, you’ll have started preparing for retirement well before you hit the magic number. But even if you haven’t saved as much money as you would have liked, there are a multitude of ways to make your savings last.
While you may not be able to eat out at fancy restaurants every night or take big vacations every year, you can still live a rich, fulfilling life on a modest budget. Being smart with your money and taking advantage of free activities and experiences are keys to maintaining a satisfying lifestyle and healthy bank account balance.
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Design Your Ideal Lifestyle
Before you make all the small decisions that will affect your quality of life in retirement, you need to take a step back and think about the big picture. How would you design your ideal life, within reason, given your current finances?
How do you envision your post-working life? Is it filled with new experiences, activities and travel to exotic locations? Or is it simpler, quieter and closer to home? Do you dream of moving to a sunnier climate, or would you want to downsize to a smaller house?
You don’t have to stick to your initial vision forever, but it’s helpful to think through your standard of living before planning your budget, as it will inform your purchasing decisions and lifestyle choices.
Know the 4% Rule
One common calculation for estimating how much money you’ll need in retirement is known as the 4% rule. This generalized guideline suggests that you should spend roughly 4% of your retirement savings every year if you expect your savings to last 30 years.
For example, if you have a retirement fund of $750,000, you could take out $30,000 as your budget for the first year. The next year, multiply that $30,000 by the inflation rate to find your annual budget.
Of course, this is more of a suggestion than a rule. Your individual circumstances will vary, but you can use this calculation as a starting point for thinking about your retirement budget.
Make a Budget and Stick to It
Budgeting is the key to saving money. Start by listing groceries, rent, insurance, utilities and other essentials. Then, review your past spending to see how much you typically spend on other expenses. Don’t forget to factor in taxes and annual inflation rates, and include room in the budget for fun and relaxation.
Currently, Social Security retirement benefits average $1,867 per month. Calculate how this will impact your budget and see whether you can cut down spending in nonessential areas.
Trick Your Mind Into Saving by Paying Yourself a Salary
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https://finance.yahoo.com/news/100-ways-live-rich-life-213005303.html
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