Posts Tagged SmartMoney

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Your 401k is looking more like a 201k.  A pension is a relic from your parents’ time.  Pretty soon, you may not even have a job to complain about.  Maybe your dreams of early retirement will have to remain only dreams.  SmartMoney recently had an article listing 5 ways to stretch your savings:

Wait a Bit

Each year that a person delays taking Social Security benefits, the value of the monthly check increases by about 8 percent.  Also, a person who retired at 66 rather than 62 could increase their retirement income from investments by as much as 40 percent!

This is probably the path that I’ll take, and not just for the financial side of it.  I actually like working, and having a reason to get up in the morning.  I can’t help it; it’s been wired into my head since I was a teenager.

Rethink the Home

Many retirees opt for a change of scenery by moving to a cheaper location.  For those staying local, selling a home and renting can sometimes cut costs, especially for those who invest the proceeds of the home sale.

This is definitely an option.  Although I plan on working in my Golden Years, that doesn’t mean that I have to live where I currently live.  I might even achieve my goal of becoming location-independent.

Ride in Style, Used

You don’t need a new car to enjoy retirement. A driver who buys a 2005 model Audi A4 sedan instead of a brand-new one, for example, chops more than $19,000 off the five-year cost of owning the vehicle; most of that comes from savings on the purchase price, but other factors help too.

While I don’t feel the need for a new car, I currently lease my vehicle.  I could certainly end this cycle when my lease is up, and buy a used car.  My commute is short, under 10 miles each way.

Tap the Right Cash

One tip: Spend money in regular IRAs before tapping Roth IRAs. Roth withdrawals aren’t taxed, so retirees can dodge that expense — and therefore take out less money each year — as they get older.  Other advisers suggest that current retirees tap their Roth savings first, so that they can take smaller withdrawals now, while the markets are down, and avoid having to sell assets at a loss.

I’m a long way from having to tap my IRAs, so I’ll need to do more research on this one.  Hopefully, I’ll have something to tap!

Postpone Some Pampering

Those who do splurge may as well get something in return: Web sites like BillShrink.com can help consumers find credit cards with rewards programs that best fit their spending habits.

We’ve really cut our spending down this year, our vacation notwithstanding.  We’re cutting more coupons than ever, and dinners in restaurants are few and far between.

All of these strategies could help you get more out of your shrinking nest egg.  What changes have you made in response to the economic crisis?

You can read the original article from SmartMoney by clicking this link: Nest Egg 2009: 5 Ways to Stretch Your Savings

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