3 Ways to Stretch Your Retirement Income

Many seniors have concerns about whether their savings will provide them with adequate retirement income for the rest of their lives. These worries can be justified as saving enough for your later years can be difficult.

The good news is that there are ways to keep expanding your money after you’ve retired. In fact, three Motley Fool retirement experts have shared their top tips here to get your retirement money up as much as possible.

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1. Stay healthy to reduce healthcare costs

Katie Brockman: It’s no secret that as we age we are more prone to health problems and illnesses, but some of these problems can be avoided by staying as active and healthy as possible.

The average 65-year-old married couple can expect to spend about $ 300,000 on medical expenses out of their own pocket when they retire, according to the latest research from Fidelity Investments.

Although health care can be costly for all retirees, those in poorer health tend to pay more. According to the Kaiser Family Foundation, among Medicare beneficiaries, those who believe they are in poorer health pay an average of $ 1,700 more in health care expenses than those who are in very good or excellent health.

While $ 1,700 a year doesn’t sound like it makes much of a difference, it adds up over time. For example, if you have retired for 25 years and you spend an additional $ 1,700 a year on health care, that’s around $ 42,500 over the course of retirement. Regardless of how much you’ve saved up in your retirement plan, there are likely many other things that you would rather spend that money on.

Of course, there are some aspects of your health that you cannot control. However, you can do your best to maintain an active lifestyle, eat nutritious foods, and get regular checkups and health checks. By avoiding as many health problems as you can and identifying potential problems before they get serious, you can lower your health care costs and use that money on more enjoyable activities.

2. Downsize your home

Maurie Backmann: Just as housing can be your biggest cost factor during your working years, it can also cost you a lot when you retire. This is true even if you manage to start your senior years mortgage-free. Downsizing to a smaller living space, however, could help keep your nest egg going further.

Even if you run out of a mortgage, downgrading your existing home might still allow you to sell your existing home for a profit, buy a cheaper one, and pocket the difference.

The smaller your home, the less you’re likely to pay for insurance and the lower your property tax is likely to be (assuming you stay in the same area after you’ve dumped a few square feet).

Smaller houses can also be much cheaper to maintain than larger ones. Think about it – there is a difference in the cost between heating and cooling a house that is 2,800 square feet versus one that is only 1,300 square feet. And if you dump some outdoor space too, you might find that it costs less for things like landscaping and snow removal.

The advantage of a larger apartment is of course that it can be conducive to renting out. If you have a larger room with a separate area like a finished basement, you may be able to find a tenant and earn rental income every month to add to your savings and social security benefits.

But otherwise, it might be worth downsizing to a bigger house, especially if you feel like you’re running out of money in retirement. And chances are, once you get used to your new space, you won’t miss your old one too much.

3. Move to an area with a lower cost of living

Christy Bieber: If you are facing a serious income gap, your best option may be to completely change where you live. This is especially true if you currently live in a more expensive part of the country.

The cost of essentials can vary dramatically from one part of the United States to another. Accommodation, food, transportation, and medical expenses may vary, as may tax rules for retirees. Since the cost of living varies greatly from region to region, your place of residence could be the deciding factor in whether you have enough pension.

To make sure your money is flowing as widely as possible, research some of the lowest cost of living places in the US where your Social Security benefits are not taxable. You may find that some of the places on the list are right for you – and that moving house can save you from a retirement of financial burdens.

Whichever approach you choose, the most important thing is to make sure you maintain a safe payout rate to ensure that your nest egg will last a long time. If you over-spend in your current situation, something has to change.

source https://dailyhealthynews.ca/3-ways-to-stretch-your-retirement-income/