The American retirement is longer than it’s ever been. That’s great news for retirees and pre-retirees looking to live out their days hitting the links on the course or napping on the couch, but can be worrying news for their savings accounts! In an era where social security benefits leave much to be desired, how can you save money after retirement?
From your friends at NW Tax and Wealth, here are three ways to help you spend less and save more.
- Downsize Your Life
For many retirees, selling off some of their assets actually leaves them feeling more unencumbered. If possible, you may want to consider downsizing your home to a smaller-footprint property, and don’t ignore the merits of a maintenance-free housing situation such as a townhome. For some people, it can be entirely possible to add $50,000, $100,000 or more to your retirement account with this one simple life-change. If you’ve got multiple vehicles and both you and your spouse are retired, consider dropping down to one car. You’ll save hundreds a year in insurance, taxes, and maintenance cost and it’s just one less thing you have to worry about.
- Drop or Alter Your Insurance
You still need insurance, of course, and your health benefits will never be more important than as you age. But when your lifestyle changes, you should take a second look at your insurance plans as it might be beneficial to change these, as well. Ask your auto insurer to adjust your rate considering you no longer commute. Talk with your financial professional about potentially making changes to your disability and/or life insurance; if you’ve purchased these policies with the intent to help cover your income if you’re no longer bringing any in, then it might make sense to discuss other options. Especially if now that your kids have left the nest, you don’t have any dependents. Your financial obligations should match your life stage.
- Know Your Tax Benefits
The tax system is set up to provide myriad benefits for retirees. Once you hit 65 you can also deduct medical expenses that exceed 7.5% of your gross adjusted income. You may even qualify for school tax deferrals/exemptions, or similar ones for property tax. And don’t forget that whatever benefits you receive, you may get them twofold if your spouse fits certain criteria.
Please note that this information is intended to be general and is not specific tax or legal advice. NW Tax and Wealth and its representatives do not give legal or tax advice. We encourage you to speak with your tax advisor or attorney regarding such matters.
How can you help to avoid pinching pennies in retirement? Start early. A qualified financial professional at NW Tax and Wealth will help you feel confident in setting the stage for a long retirement. You’ve worked hard for all these years to prepare for this moment in your life. Shouldn’t you enjoy it?
By contacting NW Tax and Wealth, you may be offered information regarding the purchase of insurance products. All of our financial professionals are licensed insurance agents. Additionally, some individuals may also be registered with a broker/dealer or as an investment adviser. Our financial professionals do not offer estate planning, tax or legal advice. Always consult with a qualified advisor concerning your own situation.
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