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5 Ways for Retirees to Save Money

Posted on in Estate Planning

To keep the transition between having a secure, stable paycheck to living only on Social Security smooth, you must figure out how to make ends meet on your new fixed income. Here are five ideas to keep that transition smooth:

Get your social security right

Social security is a huge issue for all retirees, so be sure you make the most of it. Although there are many temptations to start taking your Social Security benefits early, if you postpone it, your monthly payments will be boosted when you do begin to take it. If you are married, consider the effects that your choice may have on your spouse as well

Invest for income and growth

With rates on banks CDs and bonds at low levels, retirees have had to stretch their money to get the income that they need recently, buying dividend stocks and high-yield bonds over safer income investments. Consumer stocks often yield more dividends than their bonds pay in interest. They also have long histories of dividend increases and share-price appreciation that could help your income grow and boost your retirement nest for later retirement years.

Time your retirement account withdrawals correctly

IRAs and 401(k)s and other tax-favored accounts are also very helpful in increasing retirement savings. They do, however, increase your taxable income and can also have tax consequences for Social Security and other income. As you pull money out of your retirement accounts, consult with an account or simply pay attention to the tax impact of your withdrawals.

Consider cheaper housing

Most retirees have a large part of their wealth locked up in their homes and mortgages. After your children move out, however, you must ask yourself if you really need to keep the family home. Moving to cheaper housing is a great way to free up money for other needs.

Check your estate planning

If you have not taken care of your estate planning by the time you retire, there is no reason to delay it any further. Having basic documents such as a will and durable powers of attorney to let trusted friends and family handle your finances if something happens to you is important to smoothly transition as you age.

If you are preparing yourself for retirement, contact an estate planning attorney in Wheaton to set up your estate planning today. Attorneys at Stock, Carlson & Asso. LLC can help you smoothly transition into retirement and be prepared for anything.

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