It could be daunting trying to save money to retire stress-free. Perhaps you’ve sat down to calculate how much you'll need and got overwhelmed by all the things you have to consider.
Will you pay off your house or still have a mortgage? What about everyday expenses like groceries or utilities? And most importantly, have you saved enough, or are you going to run out of money?
Before you start to panic with your estimated retirement budget in front of you, here are a few things to consider that can set your mind at ease.
Eliminate your late tax debt
Each year, the IRS forgives millions in unpaid taxes. If you have more than $10,000 in tax debt, or have 3+ years of unfiled taxes, you could get forgiveness too. You might be eligible to lower the amount you owe, or eliminate your tax debt completely.
Easy Tax Relief could help you lower or get out of your tax debt for good. They’re well respected in the industry and have been recognized for their ethical standards when dealing with tax debt. While most tax companies just put you on a payment plan and file your taxes for you, Easy Tax Relief talks to the IRS directly. They can help you pay off your tax debt faster while potentially reducing what you owe.
Important: Not everyone will qualify. To take advantage of this special program you must owe more than $10,000 in past-due taxes.
Fill out this form to get started
Expenses are lower
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One of the great things about retiring is you don’t have to work anymore, which could reduce your daily expenses.
You might save money because you don’t have to pay for gas, coffee, or lunch at your office. You also may save cash by ditching the professional wardrobe you spent money on each year.
Driving less might also help you save money on car insurance, so check with your insurance provider about a potential reduction in your insurance bill.
Social Security is there for you
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There might be doomsday news out there about whether Social Security will exist when you retire or if you’ll be able to collect it. But for now, Social Security isn’t going anywhere, so remember to factor that into your budget.
While Social Security alone likely won't be enough, it will provide a nice pad. Use the calculator on the Social Security Administration’s website to estimate your monthly payments.
Downsizing may lower your cost of living
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Most likely when you retire, you'll also be an empty-nester, with your children leaving home to start their own lives. Perhaps you want to get a smaller house with less upkeep as you get older.
Downsizing your home could give you a windfall from the sale of your house, lower your monthly utility bills, and reduce your property taxes.
Pro tip: Paying your mortgage may have increased your equity in your home. Check with a financial professional to see if there’s a way to unlock some of that equity when you need it.
Earn $200 cash rewards bonus with this incredible card
There's a credit card that's making waves with its amazing bonus and benefits. The Wells Fargo Active Cash® Card(Rates and fees) has no annual fee and you can earn $200 after spending $500 in purchases in the first 3 months.
The Active Cash Card puts cash back into your wallet. Cardholders can earn unlimited 2% cash rewards on purchases — easy! That's one of the best cash rewards options available.
This card also offers an intro APR of 0% for 15 months from account opening on purchases and qualifying balance transfers (then 20.24%, 25.24%, or 29.99% Variable). Which is great for someone who wants a break from high interest rates, while still earning rewards.
The best part? There's no annual fee.
More time for DIY projects
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Your budget may have an extra line for dining out or home repairs. But with more time at home, consider taking on tasks you may have paid others to do when you were still working.
Think about cooking more meals in your kitchen or trying to repair things yourself now that you have extra time in retirement to devote to home projects.
You’ve invested enough for retirement
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You may be surprised to find that you have invested enough money for retirement already.
As you approach retirement, sit down with your current budget as well as your estimated retirement budget to adjust your plans for saving now as well as spending later.
Adjusting your savings now after a new job or promotion could change your investment plans for the better.
Your kids are older
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As you get older, so do your kids. They may live with you after college or be out on their own, but they most likely will have a job, which could cover some expenses you would’ve handled when they were younger.
But keep in mind that helping them is not the same as paying for high-ticket items like a car or covering their student loans.
Remember to pay yourself and start investing in your retirement and savings before you pay expenses for your adult children.
More time to optimize your investments
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Being retired means you may have more time to devote to your investment portfolio.
Perhaps you could learn how to rebalance your assets on a regular basis, or you could find a financial planner to help you (if you haven’t already).
You may find it's best to put money from your portfolio into more diverse investments. And you can watch your portfolio more often to see what works and what doesn’t work to make your investments work for you.
Long-term care insurance
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One of the most expensive things you may have to pay for when you’re retired is long-term care, and it could drain your savings. It might be a good idea to start looking into plans now if you haven’t already.
The earlier you take out a policy, the lower your premium. Long-term care insurance may cover any expenses for nursing or medical care as you get older.
Adding to your portfolio
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There’s no age to stop investing. Even if you’re not earning a regular paycheck, you should continue to invest.
Consider reinvesting any earnings you have as you get older so you can delay touching your principal.
Stocks, bonds, or mutual funds may generate enough income each year to pay your daily expenses.
If you’re over 50, take advantage of massive discounts and financial resources
Over 50? Join AARP today — because if you’re not a member you could be missing out on huge perks. When you start your membership today, you can get discounts on things like travel, meal deliveries, eyeglasses, prescriptions that aren’t covered by insurance and more.
How to become a member today:
- Go here, select your free gift, and click “Join Today”
- Create your account (important!) by answering a few simple questions
- Start enjoying your discounts and perks!
You’ll also get insider info on social security, job listings, caregiving, and retirement planning. And you’ll get access to AARP’s Fraud Watch Network to help you protect your money, as well as tools to help you plan for retirement.
Important: Start your membership by creating an account here and filling in all of the information (Do not skip this step!) Doing so will allow you to take up 25% off your AARP membership, making it just $12 per year with auto-renewal.
More time for a side hustle
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There are plenty of ways to make extra money with a side hustle, especially if it’s a hobby you enjoy or a new business you’ve always dreamed of starting.
Retiring means you have more free time to finally pursue those other plans and make some money while enjoying your new adventure.
Bottom line
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If you’re worried about ways to supplement your Social Security when you retire, analyze your current budget and your projected retirement budget, then figure out how you can save more now to have the amount you need later.
You also might want to revisit your budgets on a regular basis as your job situation or plans for retirement change.
Lucrative, Flat-Rate Cash Rewards
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Wells Fargo Active Cash® Card
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- Select “Apply Now” to take advantage of this specific offer and learn more about product features, terms and conditions.
- Earn a $200 cash rewards bonus after spending $500 in purchases in the first 3 months.
- Earn unlimited 2% cash rewards on purchases.
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