Back to the Basics: Ways To Maintain Or Improve Your Lifestyle In Retirement

In Articles, Articles: Kansas City Office, Articles: Salt Lake City Office, Back to the Basics, SLC Winter 2024, Winter 2024 by Scott Dougan

Approaching retirement age is an exciting time for most. The opportunity to spend more time doing the things you enjoy, and may have put off, leads many aspiring retirees to dream about the future like they haven’t in years. While this new phase of life can be deeply satisfying, it can also result in new and unique fears.

Retiring at this moment in time can be challenging for a number of reasons: rising inflation has made basic expenses more costly, and dramatically-rising health care costs may put a huge dent in future retirement income, especially for those who are hoping to retire before Medicare age. Combine those challenges with an always-volatile stock market and lengthening lifespans, and you may be wondering, “Can I even afford to retire?”

In light of this, I’d like to offer some options for maintaining or improving your financial lifestyle in retirement:

1. Work Longer Before Retiring
Even a year or two of continued full-time work can have a dramatic impact on a nest egg’s ability to be sustained for a retirement. Working a bit longer may be the greatest improvement a retiree can make to increase financial stability.

2. Delay Social Security Benefits
For most people, early Social Security benefits are available at age 62. Full benefits are usually available at or around age 67. By claiming benefits earlier, the checks received will be smaller and that reduced payout will continue for life. Waiting to claim benefits may add a meaningful amount to retirement income.

3. Reduce Expenses
Naturally, spending less each month allows a nest egg to last longer. Right-sizing the home, monitoring dining-out expenses, and keeping closer tabs on frivolous purchases can go a long way toward more sleep-filled nights.

4. Work Part-Time in Retirement
Finding part-time work during retirement can dramatically reduce necessary withdrawals from retirement accounts, while keeping a retiree active and connected with other people. For some, this is a great way to ease into retirement rather than dramatically shift from 50 hours per week to none. 

5. Pay Off Debt Before Retirement
The less debt a retiree has, the less money in savings it takes to make payments on the debt. Racing to payoff credit cards, cars, and home equity loans (and maybe even the mortgage) before retirement can be a powerful way to strengthen financial security.

6. Consider Guaranteed Income
Some retirees may wish to exchange some of their risk-based investments for guaranteed income options in order to secure a lifetime of income even if markets perform poorly or they live a very long life.

7. Rethink Inflation
Most retirees spend much less in their 80s and 90s than they do in their 60s. Therefore, planning to have reduced expenses later in life may allow for a nest egg to stretch much further even if prices are rising on the things you do still buy.

8. Invest For A Longer Time Horizon
Knowing that a successful retirement can last 30 or more years, earmarking a portion of retirement savings for higher-risk investments may lead to higher returns and a more sustainable nest egg. Caution should be exercised to ensure that essential expenses are funded using safe or guaranteed sources like Social Security, pensions, and income annuities.

As you can see, this partial list of options for making a nest egg last longer can lead to tremendous benefits for maintaining or even improving one’s retirement success. Most aspiring retirees will consider how a combination of these options allow them to generate more income during retirement, sustain their assets longer, and even give more away to others. You have plenty of choices, but what you do with those choices will have a lot to do with how you spend your prime time years.