Everyone knows that the best way to save for independent retirement living is to start early, save, and spend wisely. But as we age, our opportunities to compound our savings to serve us in retirement begin to dwindle. Here are some ways that you can save for independent retirement living at any age:
- Downsize. Downsizing can save you a considerable amount of money at any stage of your life. Consider selling off belongings you don’t need, renting out rooms you don’t use, or even moving to a smaller home or retirement community which requires fewer maintenance costs.
- Home equity. For many Americas, their home remains their most valuable asset. This is why it’s so important to ensure that you have paid off your home by the time you retire. A house which is fully paid off can be tapped for equity if needed or sold to fund a move to smaller home or an independent retirement living community.
- Eliminate debt. Having debt after you retire means that any retirement savings you draw on will have to go toward paying those payments instead of towards enhancing your quality of life. Work to consolidate and eliminate these debts before you retire.
- Build an emergency fund. Emergency funds are for seniors, too! Remember that you will often be limited to drawing specific amount from your retirement savings each month if you want it to last. Put a little bit away now to make sure you have an emergency fund to draw on for unexpected expenses. While the ideal is 3-6 months of income in savings, even a few hundred dollars that could go toward surprise maintenance or health costs can help. Remember that any additional money you take out of retirement savings won’t be there to compound interest for future payments.
- Trim your budget. Some days it may seem as if there’s nothing to trim. But do you really need to subscribe to cable, or will a streaming movie service like Netflix do? How many times a month do you eat out? Can you do a potluck with friends instead? Do you really need to buy that book, or can you get it from the library? While we may think that what we have in savings for retirement will be enough, many seniors greatly underestimate how much they will spend. Put together a budget now, and stick to it.