Five Effective Ways To Make Your Money Last Longer
For many, living a long life is a reward. Everyone aspires to live a long and happy life. Let’s say you will live to 100 (congratulations!). If you are keen on adding years to your life, why not start adding some greenbacks to your bank account? This way, you can build a sizeable nest egg. You definitely need a few strategies to accentuate your retirement savings. Besides that, you need to have a strategy to make your money last until you turn 100. More than anything else, you need to follow a low-cost lifestyle (well, it’s not as difficult as you might think) and save enough money for a rainy day. Here are some effective ways to build your nest egg:
Be Aware Of How Much You Need To Live Comfortably Until You Are 100
You must take into account your lifestyle expenses and your basic living expenses. You may love to travel at least twice a year or prefer to dine out. Hence, you must keep track of how much you are spending. Many experts suggest that you deposit your Social Security, pension, and investment withdrawal into a checking account if you want to cover your basic expenditures every month. Deposit the remaining part of your income to a ‘lifestyle’ account. In case you live for a longer period of time, your portfolio would automatically become smaller. In that situation, you can cut down on your lifestyle expenses. At the same time, you can cover your living expenses and continue to stick to that 3% – 4% range.
Refrain From Spending For Your Family More Than What You Can Really Afford
Who doesn’t love their families? Everyone wants to stay by their side in times of crisis and help them out in difficult situations. However, that doesn’t mean that you should risk your own savings. If you start spending too much on your children and grandchildren, your savings will be adversely affected. Your children are capable enough to earn their livelihood, but things will get harder for you when you get older.
Continue Earning Money
If you decide to work post-retirement, it can have a considerable effect on how long you are able to help your savings last. However, you may not get the opportunity to work in your current position. In that case, you can opt for something different in order to continue earning money, such as working on a contractual basis or working part-time for Uber. Remember that even a small sum can have a huge effect on your savings. Choose whatever suits you best. You can even start a home-based business or buy stakes in a local business to have a steady flow of money.
Your Lifestyle Choices And Your Spending Pattern Are Important
The amount of money you take out for your expenditures will have a significant impact on your investment portfolio. If you live until 100, you have to spend as little as possible. Spending a meager 3% to 4% on a yearly basis will eventually work in your favor. Make it a point that you wouldn’t be taking out more than $4000 from your savings account in a single year. The earlier you start saving and make investments, the more time you would have on your hands to make your money grow and compound. It ultimately boils down to the age you are quitting your job and your lifestyle choices. To put it differently, you need to make conscious choices on what you should spend your money on.
Don’t Get Conservative About Your Financial Portfolio
The problem arises when you spend around 4% of your investment portfolio each year. In all probability, your conservative portfolio won’t generate returns that will help you survive until the time you reach 100. You must aim towards getting optimum rates of return so that your financial portfolio can grow rapidly in order to cope up with taxes and inflation in the due course of time. Work towards it since you are the one who will reap the benefits later in life.
Living a long life is an excellent thing and only a lucky few have this incredible gift. But you do need to make certain plans for your future whether you live until that age or not. The more savings you have under your belt, the more secure you will feel in the times to come.
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