Don’t Outlive Your Retirement Nest Egg
Budgeting for retirement can be a difficult task, especially with the real possibility of unexpected expenses arising. However, there are many steps future retirees can take to ensure their savings don’t run out, including:
1. Delay Taking Social Security
As long as people have contributed to this program during their working years, they are entitled to a monthly check after claiming their benefit in retirement. The earliest age Social Security can be drawn from is 62, but it pays to delay. In fact, each year until the age of 70, payments increase in value, which is why putting it off is a smart choice. Relying heavily on this benefit for retirement income isn’t smart, but it is a great way to supplement a nest egg.
2. Pay Off The House
Carrying debt into retirement can be a detrimental to savings after leaving the workforce, especially if its as substantial as a mortgage. That being said, it is recommended that homeowners pay their home loan in full before retiring so their payments don’t come from their retirement fund. Of course, this won’t be possible for everyone but, if possible, it can prevent people from running out of money.
3. Buy An Annuity
Retirees who want to ensure they have a monthly income for the rest of their lives may want to consider this option. To secure an annuity, people will need to pay an insurance company a sum of money, which guarantees them 12 checks a year. However, it is important to be aware that annuities can come with high costs and fees, and they may not be able to be passed on to children or other heirs if the money is not fully used. However, those who are worried about not having any money in their later years would be wise to consider this option.
4. Work Longer
After so many Americans saw their retirement funds slashed during and after the financial crisis, some have opted to work longer to ensure they have enough money to live on later in life. While some are completing this move out of necessity, it is also a good way to help ensure people don’t outlive their nest egg. Each additional year is one that they are able to save toward retirement and not spending, so it can be extremely beneficial.