Stretch Your Nest Egg

The global economic unpredictability has made planning for retirement a rather complex job for a growing number of Americans. As financial crisis forced a string of giant corporations to fold, it has become clear that people cannot rely solely on company pension for financial independence. Moreover, with the advancement in technology, more and more people are living longer than expected that the need to stretch the nest is inevitable. Below are 5 ways to make the most out of your nest egg and help you achieve your retirement goals.

1. Put off claiming Social Security.
A person’s earning power generally increases as he nears retirement age. Since Social Security is calculated based on the 35 highest-earning years in the workforce, then a person’s potential payout increases along with retirement in later age. In fact, each year that a person delays his retirement affords him a 7 to 8 percent increase in Social Security benefit payouts. Such discrepancy in earnings can greatly make up for any low earnings year in his or her 20’s.

2. Review your lifestyle.
Home
Many retirees downsize to smaller nests that are easier to maintain in their golden years. Apart from the location, affordability should always be the top consideration. Forbes.com came out with an in depth feature of America’s most affordable places to retire. Columbus, Ohio, for example, attracts retirees not only because of its reasonably-priced housing and low-cost living but because its 4.5 percent inflation rate allows them to maximize their savings than other quickly-developing cities.

Car
Slash down on monthly gas bills by being conscious of your consumption. The key word in retirement is practicality, therefore switching from two cars to just one and merely using fuel with the lowest required octane are valuable money-saving ideas.

Credit cards
To avoid the finance charges that come along with the unmanaged use of credit cards, it is always best to plan your purchases and pay in cash. If you are a disciplined user, however, and always pays off balances before it’s due, you may avail of the various perks and savings that come along with frequent use. BillShrink.com is one websites that has a guide for consumers on finding credit cards that tailor-fit their spending habits.

3. Work part-time.
While most people look forward to “smelling the flowers” and just having a restful retirement, there’s always an option to go for a part-time job and earn extra income, especially when the need to be busy again creeps in. Surely this will stretch the nest egg a little further. In order for a part-time job to be less taxing than it was during pre-retirement, it has to be something you are passionate about or interested in learning more about. You can be a school consultant or a writer or perhaps a church choir trainer. The cities of Dallas and Houston in Texas brag about its latter-year employment possibilities for the enterprising-type as evident in 20 percent of its 65 year-old and above residents who are collecting a weekly paycheck.

4. Earn from passive income.
Passive income is allowing your money to work for you, instead of you working for it. Some examples of this income are owning a rental property, royalties on an invention, or creative work and network marketing.

5. Stay healthy.
People work so doubly hard with eyes on the goal, i.e. retirement that they fail to safeguard the very unit they only have to enjoy it – their health. Without good health, all those years of efforts will be for naught. For example, 5 years before retirement, a manufacturing technician suffered a cardiac arrest for completely ignoring a doctor’s advice to get regular exercise, follow a healthy diet and take regular maintenance medication. Instead he abused his body with alcohol and long hours of work. Consequently, he was laid-off and he started to undergo a cardiac rehabilitation process, the cost of which depleted the family’s entire savings.

The beauty of retirement is unfortunately lost in similar situations. The truth is, whether we are in control or not, the route towards retirement is littered with as much certainties as surprises. The abovementioned tips are no doubt important for having secured “golden years,” but its fullness is only truly attained if we take care of ourselves and make the most of our day-to-day life as much as we do about our future.

No related posts.