Planning for retirement starts in your twenties, but what if you are in your sixties and nearing retirement and haven’t planned properly? Is there anything that you can do to make your retirement more financially independent? The answer is yes. Here are 5 ways a women over 65 can still plan for a financially independent retirement:
- Develop good habits when it comes to spending money
This is something that can be helpful at any point in life, but especially when you are on a fixed income.
- Make a budget — make sure you know what your income and expenses are on a monthly basis. Knowing how much money is coming in, going out, and how much is left over gives you a clear picture as to how your money needs to be spent.
- Make a list and stick to it — when you go grocery shopping, look through the store ads, plan your meals for the week, and decide what you need to buy before you go to the store. Getting to the store and deciding what you want can lead to making several dollars of impulse purchases.
- Don’t go shopping if you don’t need something—when you are on a fixed budget, it can be hard to simply window shop without wanting to buy something that you see. This is where you really have to become disciplined and decide what you want verses what you need.
- Maintain a good credit rating
Having a good credit rating and a high credit score will give you flexibility when it comes to getting a loan—in fact, having a low credit score can inhibit you from being able to get a loan altogether. Perhaps you already own a home, but you still may need the ability to obtain credit cards, other personal loans, or a home equity line of credit during your retirement years. Having a good credit score will give you the ability to obtain a good rate on the credit that is extended to you. That means you will be spending less money on interest when paying back these obligations, and that means more money in your pocket.
- Start saving early
Obviously, the bet scenario for a solid retirement is starting to plan for it in your twenties. But sometimes circumstances arise that don’t allow that to happen, so if you are nearing retirement and haven’t started saving, nowis the time to start. Even though you won’t be able to set aside a huge nest egg to last the duration of your retirement, you can still get in the habit of setting aside a small amount of money each month to give you a cushion to fall back on. If your car needs new tires or the hot water heater goes out, you don’t want to have to choose between making those repairs or buying groceries and medication.
- Look for expenses to cut
If you find yourself alone during your retirement years and on a fixed income, you may want to consider cutting some expenses. Of course, there are some items such as groceries and insurance that you really can’t cut, however, there may be several expenses in your budget that can be adjusted down. Consider small expenditures such as getting a less expensive package of television channels; call your telephone provider to see if there are options such as voice mail, call forwarding, or 3-way calling that you don’t use or need that can be removed from your account; or cutting items from your budget such as eating out as often, going to the movies, or other entertainment. It may take an adjustment to get used to, but being able to cut some unnecessary items out of your budget will greatly help with being able to pay your monthly bills and live comfortably. Similarly, you may want to look at cutting larger expenses too. Perhaps downsizing your home could save you hundreds of dollars a year in real estate taxes, you may even be able to find a smaller home that will cost less to heat/cool—adding to your monthly savings, and a less expensive home may allow you to take some equity out of your home to use for living expenses.
- Take care of you
Doing as much as you can to stay active and healthy can go a long way to cut down on out-of-pocket medical expenses. Even though you will have Medicare in your retirement years, it doesn’t cover everything. Most preventative health visits are covered, so make sure that you get regular mammograms, blood work, and a yearly physical. Eating healthy, exercising regularly (even if it’s just stretching and walking), and stimulating your brain with crossword puzzles or other activities can help lead to overall better health.
Catherine Gareri, an Associate with Finivi, works primarily with women going through a period of transition in their lives, or who are facing a new life challenge that may require difficult financial and emotional decisions to be made or at least considered. If you need guidance navigating through a difficult life transition, or simply want help with your pre- or post-retirement planning needs, we can help. You can call (800)530-6635 for a complimentary consultation or click here to schedule online.