— Including Some You May Have Overlooked!
There are many sources of financial information to help retirees maximize their money in retirement. Sure, you can use a retirement calculator, re-balance your portfolio, buy annuities, revisit your risk reward profile, etc.
Oh, I don’t mean these aren’t important things to consider, and hopefully you have a good financial advisor who can help you with these considerations. But we scoured dozens of websites for simple strategies that you may not have considered to make your life easier in retirement, and that can add a little s-t-r-e-t-c-h to your retirement dollars. Here are six ideas to look at:
1. Downsize your home and invest the difference
It is not unusual to consider getting rid of that house you raised your family of thirteen in now that the nest is empty. But few people think of it as an investment strategy to enhance your income in retirement. Many retirees are “house rich” and “cash-poor.” Sell that oversized house and let the memories go. Then buy something smaller and less expensive and invest the difference. This frees up unused equity in your home and turns it into cash generating investments.
2. Cross the border for medical and dental services
Some of the biggest expenses retirees face are medical and dental services in later years. By eating healthy and exercising, you can cut down on out-of-pocket medical expenses substantially. But what about dental expenses that can’t be avoided. Even with careful dental practices, crowns and fillings break down over time.
Putting off dental services can jeopardize health and, in almost all instances, will result in even higher expenses when it can no longer be ignored.
That might be at a time when your retirement savings are getting low. Savings of up to 80% can be realized by getting dental care in Mexico and Americans have been doing this successfully for decades. And since the savings can be in the thousands or even tens of thousands of dollars, the cost of travel is hardly a factor. Interested to discover how much you can save? Download our free gift to you, a $50 voucher to use toward your next dental treatment here
In recent years, dental referral agencies have emerged that have carefully examined the best places in Mexico to get dental care, and identified the clinics that have a history of good quality dental care.
3. Retire to a tax free state or a lower cost city
Many retirees think about pulling up roots to move to the city their children have chosen, and sure, being near the grand-kids is great (no, we are not suggesting baby-sitting fees to increase retirement income!). But since you need to draw down funds from retirement accounts as mandated by the IRS, living in a tax-friendly state and/or moving to a lower cost city can make a world of difference in terms of your comfort in your later years. Kiplinger has done an analysis of tax-free and low cost locations. Check their website for tips.
4. Use the “Utility Theory” when making new purchases
The Utility Theory is a little known approach developed by economists over 100 years ago. It’s based on the concept that spending more for an item brings greater satisfaction, but only up to a point. Then it’s diminishing returns. When you purchase something, spend enough to have what you need, and what you would enjoy, but resist the temptation to spend beyond that once the threshold of satisfaction is met. Do this day in and day out, and the savings mount up.
5. Claim spouse related social security payments
When both spouses are over age 62 and one claims retirement benefits, the other can claim the spousal retirement benefit. If your spouse earned more income than you over the years, it could result in benefits which may be higher-paying than your own benefits. This could add hundreds of dollars a month to your income.
6. Trade fees for services
Were you a bookkeeper in your career, a seamstress, a tradesman? You may have valuable skills that could be traded for things you want to purchase. One carpenter we know traded extensive dental work for an addition on his dentist’s house. Local merchants, who have profit margins in their products, may be willing to swap something for your skills. This is more common than you might think.
What do all of these tips have in common? Each is a fresh approach to making your retirement funds go further. So think outside the box. Trade your car for one that is more fuel efficient. Start a new “encore career” that focuses more on satisfaction than big bucks, but helps pay the bills. Go to yard sales and flea markets and purchase items to sell on eBay. These are all suggestions we found on a variety of financial websites. Try some on, and see what fits!