One of the biggest fears soon-to-be retirees have is that they won’t have enough money to last them throughout their retirement. And rightly so — with concerns surrounding inflation, recessions and a volatile stock market, over half of Americans feel behind on their retirement savings, according to a Bankrate poll. These fears may keep them from taking the plunge and quitting their jobs once they hit retirement age, or they may delay retirement for years or perhaps even indefinitely.
However, with an intentional plan and the right support in place, you can retire comfortably — and confidently — at the age you choose. To provide some guidance on how to prepare, seven financial experts from Kiplinger Advisor Collective discuss their top tips for soon-to-be retirees looking for ways to make their savings last throughout their retirement and banish their fears of not being able to survive financially.
Get a financial professional in your corner
“I like to advise that they consult with a financial planner who can help them lay out their options based on all of their assets available. Then, they can decide on when to use each asset in order to maximize how long it will last. By having a financial professional in their corner, people can worry less about how they are going to get by and can focus more on making the most of their retirement.” — Angela Ruth, Due
Live within your means
“There are many things that clients can do to make their money last throughout retirement. The one thing that clients can control is their living expense level. Living within your means — where you only live on the income you make and don’t take money from the investment principal — can make someone's money last much longer.” — Mario Hernandez, Longevity Wealth Management
Find income-producing hobbies
“Imagine your retirement capital like a bucket holding financial resources. To make it last for decades, consider two key aspects: being intentional about what flows out (distributions) and finding creative ways to counter the outflows (additional income). Today, there are more retirees than ever performing income-producing hobbies and side jobs, supported by their ability to work remotely.” — H. Adam Holt, Asset-Map
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Trade down to avoid sacrifice
“Inflation is one of the great enemies of those on a fixed income (or no income). Develop an understanding of different options at different pricing tiers and budget retailers, of the extra price we pay for brand and convenience and a grounded sense of what trade-offs you're willing to make. Assuming no financial windfalls come in, reasonable trading down could mean saving without sacrificing (much).” — Robert Ribciuc, EBITDA Catalyst
Map out your 'essential' and 'variable' expenses
“First, I encourage clients to categorize their expenses as core (or essential) and lifestyle (or variable). I try to help them match their essential expenses with their sustainable and predictable sources of retirement income. Next, I look at their variable expenses. We then can determine a safe withdrawal rate. This exercise helps clients feel more engaged, confident and empowered.” — Marguerita Cheng, Blue Ocean Global Wealth
Create a detailed monthly budget
“They should review any expected retirement costs and create a monthly budget. They should also review all of their assets to see which ones would make sense to sell. Next, they should add up how much they have between their investment portfolio and any other accounts. Then, they should create a plan on how to apply everything they have to their monthly budget to make it last as long as possible.” — Justin Donald, Lifestyle Investor
Think of your home equity as a tool
“Retirees should consider their current home equity and their living situation goals they have in their financial assessment. If they have a lot of equity, they could choose to sell their home and downsize into a smaller home, pocketing the cash for spending needs. They could get a reverse mortgage or home equity loan if they want to stay in their current home but need more cash for expenses.” — John Bodrozic, HomeZada
- Your Secret Weapon to Help Win the Retirement Saving Battle: Roth 401(k)
- A Key to Spending without Worry in Retirement: Longevity Insurance
- The Joy of Owning a Business in Retirement
- Are You Still Chasing the Almighty Dollar, Even Though You Have Plenty to Retire?
The information provided here is not investment, tax or financial advice. You should consult with a licensed professional for advice concerning your specific situation
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