No one likes to think about the end, but when it comes to money, it’s important to plan for retirement with a long-term mindset. Making your money last is something that all retirees and those planning for retirement have to think about.
After all, no one wants to run out of money before they die. The good news is that there are ways to make your money last for longer, making this something anyone can accomplish with a bit of patience, discipline, and self-control.
In the following post, you’ll find a list of the top five tips to make money last for the rest of your life and even longer.
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If you’re ready to be matched with local advisors that can help you achieve your financial goals, get started now . Tip #1: Save, save, save.
The most important thing you can do to make your money last is to start saving as early as possible. The sooner you begin to save , the more time your money has to grow. If you’re already retired, it’s not too late to start saving. Even if you only have a few years left until retirement, every little bit helps.
The key to saving effectively is to live below your means. While this may sound like obvious advice, that doesn’t mean it’s less relevant. Living below your means is about spending less than you earn and investing the difference. If you can do this consistently, you will build up a sizeable nest egg that can last for decades. How to know how much you need to save
There are several different approaches to knowing how much to save every month. As a general rule of thumb, you should do your best to save as much as possible after accounting for all necessary living costs like housing, food, transportation, and healthcare. However, saving “as much as possible” may not cut it, and you may need to take extra steps to ensure your money will last long enough.
But how do you know if you’re saving enough or not? You still need a specific number to aim for, which is where the following approach comes in.
You need to estimate how big your nest egg needs to be by the time you retire to provide enough income to pay for your desired lifestyle during retirement. This is done in two steps. You first need to know how long your money needs to last. That goes through deciding when you plan to retire and knowing how long you’re likely to live, which you can find in online life expectancy tables.
Once you have that information, you can establish a monthly, quarterly, or annual withdrawal plan that provides enough income to pay for the lifestyle you want. You can then use an online calculator to determine the value of your nest egg so that it lasts the number of years you’ll likely have left.
Once you get that number, you can use the same calculator to find out exactly how much you need to set aside every month, starting today, for your savings to grow into the nest egg you just calculated. Tip #2: Max out pensions and social security
Pensions and social security are two of the most important sources of retirement income for many retirees. If you have access to either of these benefits, be sure to maximize them.Pensions are a type of retirement plan offered by many employers. They generally provide a fixed income for life, making them an ideal retirement income source. If you have a pension, find out how much income it will provide […]
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