For many, living a long life is a reward. However, every situation has its pros and cons. If you survive for a longer period of time, you ought to have retirement savings that would last till then and that is definitely no easy feat. Here are a few strategies to accentuate your savings, prevent your savings from draining out, add more bucks to your bank account, and being aware of exactly how much you need to live a long life. It doesn’t matter at what age you take retirement. You need to start building your savings from today itself. But, once you start inching towards retirement, you can apply some strategies that can help your money last. Here are some failsafe strategies.
Continue Earning Money
If you decide to increase the years you work, it can have a considerable effect on how long you are able to help your retirement savings last. You may not get the opportunity to work in your current position. In that case, you can opt for something different in order to continue earning money, such as working on a contractual basis or working part-time for Uber. Remember, that even a small sum can have a huge effect on your retirement savings. Choose what suits you best.
Don’t Allow Your Retirement Savings To Drain Out Too Quickly
The amount of your income you take out for your expenditures will have a significant impact on your investment portfolio. If you live until 100, you need to spend as little as possible. Spending a meager 3% to 4% on a yearly basis would eventually work in your favor. Make it a point that you wouldn’t be taking out more than $4000 from your investment portfolio in a single year. The earlier you start saving and make investments, the more time you would have in your hand to make your money grow and compound. It ultimately boils down to the age you are quitting your job and the type and size of your investment.
Don’t Get Conservative About Your Retirement Portfolio
Retirees have the habit of being exceedingly conservative. The problem arises when you spend around 4% of your investment portfolio each year. In all probability, your conservative portfolio won’t generate returns that will help you survive until the time you reach 100. You must aim towards getting optimum rates of return so that your retirement portfolio can grow rapidly in order to cope up with taxes and inflation in the due course of time. Work towards it, since you are the one who would reap the benefits in the later stages.
Be Aware Of How Much You Need To Survive Until You Are 100
After retirement, you need to take account of your lifestyle expenses and your basic living expenses. You might love to travel at least twice a year or love to dine out. Hence, you must keep track of how much you are spending. Many experts suggest that you deposit your Social Security, pension, and investment withdrawal into a checking account if you want to cover your basic expenditures every month. Deposit the remaining part of your income to a ‘lifestyle’ account. In case you live for a longer period of time, your portfolio would automatically become smaller. In that situation, you can cut down on your lifestyle expenses. At the same time, you can cover your living expenses and continue to stick to that 3% – 4% range.
Refrain From Spending For Your Family More Than What You Can Really Afford
Who doesn’t love their families? Everyone wants to stay by their side in times of crisis and help them out in difficult situations. However, that doesn’t mean that you would risk your own retirement. If you start spending too much on your children and grandchildren, your retirement savings will be adversely affected. Your children are capable enough to earn their livelihood, but things will get harder for you when you get older.
Living a long life is an excellent thing and only a lucky few have this incredible gift. But, you do need to make certain plans for your future. The more savings you would have under your belt, the more secure you would feel in the times to come. Arm yourself with as much money as you can. It will surely come to your aid in your dark days.