Saving During Retirement

Facing the loss of income worries many when they enter retirement.  Suddenly they must rely solely on the accumulated fund, and not from a steady income from work. This fund may have been pooled from two or more sources such as a pension, social security, savings plans, and investments. The worry tends to be focused on if they haven’t accumulated enough to live on. Therefore, calculating what expenses you will need in retirement and then actively building and contributing to a varied retirement plan is vital. The plan builds your nest egg, but you can still live comfortably and still save AFTER you retire.

Here are a few suggestions:

First - Have a financial plan in place and follow it.
This plan will serve as a monetary guide during your golden years and can be adjusted as needed. Having and following this plan not only helps you manage and stretch your money over a long period of time, but also relieves the stress and worry over not having a plan in place.

Second - Consider increasing your liquid income with a part-time job.
Working part-time provides a little extra money and it helps keep retires active. However, there may be a restriction. Check with the Social Security Administration beforehand to find out if you have an annual income limit that you cannot exceed. If exceeded, you could lose a portion of your Social Security Benefits.  

Third - Make your savings work for you. 
Many retirees have for years placed their funds in a regular savings account. Moving a portion of these funds to certificates of deposit (CDs) accounts at different terms (6-, 12-, 36-month, etc.) allows your funds to grow by earning interest yet remain fairly liquid.  The longer the term of the CD, the higher the interest rate earned. In today’s economy however, you’ll need to shop around to find the best rates. Currently, CD rates are running very low.

Check into the rates of area money market accounts. You might find this type of account currently pays more than CDs – has a higher interest rate. You’ll have access to the cash; however, it will be limited. You’ll be able to withdraw funds typically 4 or 6 times a month, depending on the financial institution. And, there are often opening and maintenance balance requirements. Since this is used for savings and wouldn’t be used as a regular checking account, you very well may meet these requirements and never have an issue with them.

Fourth - Take a second look at your life insurance. 
You may have insurance coverage for more than you now need.  Typically life insurance is taken out to cover the family’s loss of income from work due to death.  However, since you are no longer receiving a large portion of your income from work, you might be able to reduce your insurance thereby saving you money.

Fifth - Review and eliminate the small things that waste your funds. 
If you have a checking account with a facility that charges fees for the account or convenience cards such as debit or ATM, consider switching to a credit union.  Credit unions typically offer free checking programs and some include free checks and no reorder fees.  Reordering checks at some banks can cost over $25. Watch for other service fees you are being charged but don’t always notice. Ask for and carefully review bank service fee documentation.

Sixth - Embrace senior discounts. 
Senior discounts are given at various stores and restaurants. Seniors may also receive discounts on various travel services. Register with the American Association for Retired Persons (AARP) to receive your “AARP card.”  Present your AARP membership card at various establishments and receive discounts. What may seem like saving only pennies on the dollar that moment, adds up to a tidy savings over time.
For more discounts, please review “10 Great Senior Discounts” on the U.S. News & World Report website.

After retiring, it is still possible to stretch your funds by cutting out unnecessary fees, reassessing your needs and making changes, and taking avenues of saving such as discounts and interest earned.  However, your available retirement income depends on how you prepare well in advance. Effective, proactive retirement planning that spans many years is critical in sufficiently providing for your future income needs. Check with your HR department, financial planner and credit union to find out more about your retirement plan options.