Retiree households over 65 spent $57,818 on expenses in 2022, according to the most recently available data from the Bureau of Labor Statistics (BLS). While this figure will vary due to numerous factors, it’s worth pointing out that this is 10.9% higher than the previous year. If you’re a retiree, you want to stay on top of your expenses, since you’re likely living on a fixed income now — and don’t want to run out of money.
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Continue To Invest
“By leaving a portion of your portfolio invested in the market, you have the opportunity to hedge against inflation and seek higher returns,” said Jordan Mangaliman, owner of Goldline Financial Services.
It’s tempting for retirees to depend on things that feel safe, like fixed-income assets, pensions and Social Security, but you don’t have to miss out on potential returns. Continue investing to keep your funds growing.
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Maintain an Emergency Fund
“Younger generations that are still working are more likely to keep an emergency fund, but it doesn’t mean retirees shouldn’t do the same,” said Mangaliman.
While retirees may want to rely solely on their pension or investment income, it’s important to remember that an emergency fund can bail you out when unexpected expenses crop up.
“While you aren’t worried about job loss in retirement, you’re not immune from economic woes like the possibility of a recession, and expenses like medical bills and car trouble can be hard to cover if you need to pull from retirement accounts,” added Mark Henry, the founder and CEO of Alloy Wealth Management.
Increase Income Streams
“Think about how you can generate extra income, whether by working part-time, renting a room or even using your skills as a consultant,” said Erik Severinghaus, founder and CEO of Bloomfilter. “It helps you financially and keeps you connected and engaged.”
Working people often look for multiple income sources, because they can’t rely on one paycheck. As a retiree, you may want to consider pursuing a side hustle or picking up a part-time job to ensure that you have enough money coming in.
You may also want to try to find a profitable hobby so that you have something to look forward to while bringing in some extra cash.
Keep Investing In Yourself
“I’ve noticed that workers never stop learning,” Severinghaus said. “Whether taking online courses or following the trends, they know that knowledge is power. For retirees, this means you need to stay curious, too.”
Keep investing in yourself — this could be by learning more about your finances, prioritizing your health or just practicing a new hobby.
Stay Informed on Money Management
“As you age, try to continue to educate yourself and stay up to date on how you can best manage your money, whether you do your own research or work with a financial advisor,” Henry said. “If you learned to budget 30 or 40 years ago and never looked back, there are likely things you can do better and improve on, and there is absolutely technology that can make managing your money easier and more efficient.
By staying informed on money management and your investments, you can spend more time enjoying retirement and spend less time budgeting and paying bills. The objective is to understand what’s happening with your money so that you’re not stressed out.
Use Credit Cards Strategically
Henry pointed out that, when used properly, credit cards are a great way to earn rewards and build credit — or maintain good credit in your retired years. Just because you’re not employed doesn’t mean you should be afraid of credit cards. You just have to use them responsibly.
Henry added, “If you use a credit card that offers rewards for things you already spend money on, like gas or groceries, you’ll save money. If you already had a rewards credit card while you were working, consider switching to one that fits your needs and lifestyle in retirement.”
If you start travelling often to visit family, for example, look for a card offering miles to save money on flights and hotels. The key is not to unnecessarily spend money for rewards but to let daily purchases add up.
Analyze Your Budget Regularly
You’ll want to have a budget or spending plan as much as you did when you were working, because you can’t let your expenses spiral out of control.
Henry added, “Make sure to include categories in your spending plan for things you want to do in retirement, whether that’s travel, experiences with family or recreation.”
Regularly take inventory of all recurring expenses, like subscriptions or bills on autopay, and cut any that you don’t use, similar to what you likely did when you were working.
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This article originally appeared on GOBankingRates.com: 7 Financial Strategies Retirees Can Learn From Those Still in the Workforce
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