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7 Practical Ways to Avoid Running Out of Money in Retirement

7 Practical Ways to Avoid Running Out of Money in Retirement

Retirement: it’s a goal we all have and spend most of our working lives saving for. But many people worry about running out of money during their retirement—and with people living longer than ever before, it’s a relevant concern. But there are several steps you can take to make sure you can enjoy retirement.

Here are seven practical ways to avoid running out of money in retirement.

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1. Keep earning money.

You may have stepped away from the full-time career you’ve had for the past 40-plus years, but that doesn’t mean you have to completely leave the working world. Seriously consider finding a stress-free part-time job that still allows you to enjoy your hobbies, friends and families. Besides earning a little money, the job will also keep your brain sharp. Another way to earn money in retirement is to sell things you no longer need, such as a second (or third) car or other things around the house that you haven’t used in years.

2. Monitor your assets.

Keep a close eye on your investment portfolio and how it fares in the market. This isn’t something you need to do every day or even weekly, but at least once a month find out how much your assets are worth. If you notice a negative trend, you’ll be able to take action more quickly and avoid any unpleasant surprises. Another asset value to monitor is your home. Make sure to keep up on maintenance so its value stays with the current market. For most people, their home is their biggest asset.

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3. Invest for income.

Financial advisers usually tell people to become more conservative in their investments as they get older. While that’s good advice most of the time, it’s also important to invest for income—find a product that will not only deliver back on its investment, but will also earn you a little extra.

4. Spend less money.

Okay, that’s a no-brainer, right? But it’s something you need to be conscious of. If you followed a budget before you retired, do the same now. You’ll need to adjust it to note the changes in income and expenses (hopefully you’ll be spending less on clothing, gas and other areas related to working). If you’ve never had a budget, it’s not too late to draft one. Think about how much money you have coming in each month and determine how you’re going to spend it, and how much you may need to dip into savings.

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5. Save more.

Another no-brainer, but it’s true: if you save more money before you retire, it’s less likely you’ll run out of it once you stop taking home a regular paycheck. Look for ways to stash more cash in your retirement savings accounts, whether it’s a 401(k) through work or an IRA. Putting away a few extra dollars every pay period can add up.

6. Buy long-term care insurance.

Nursing home costs wipe out many people’s life savings. One way to avoid this is to plan ahead and purchase long-term care insurance, which covers costs not paid for by health insurance, Medicare or Medicaid, when you’re in your 40s or 50s when the premiums will be cheaper. This insurance will help protect your assets if you wind up in a nursing home and with 60 percent of people over age 65 requiring some type of long-term care services during their lifetime, it’s not a bad investment.

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7. Delay collecting your Social Security.

If you can, wait until 70 to collect Social Security. If you can, delay accepting your monthly Social Security payments until you reach age 70. By doing this, you’ll receive a higher amount each month.

By taking these simple steps, you’ll be less likely to outlive your savings.

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Last Updated on March 29, 2021

Life Insurance: A Secure Way To Protect Your Future.

Life Insurance: A Secure Way To Protect Your Future.

Life is a journey full of ups and downs. No one can actually predict what might happen the next moment; there are times where the happiest moments do not even take a second to turn into the gravest. Planning for your future can help you face such unwelcomed but irrepressible situations with much ease. We all want to make every memorable event of our life more special and to cherish all those moments happily and worry less, you must financially plan your future. But no one has control over life and death. Who would wish to see his family suffer in his absence? Insurance hands over the financial jeopardy of life’s happenings to an insurance company.

Importance of getting a life insurance

No one has control over life and death. Nobody would like to see their family suffering in an absence, and that’s why many people recommend life insurance. A life insurance plan is one of the best ways to secure the future of your family, even against those financial troubles after an untimely demise. These plans are safe and credible, and you could trust them for your family’s better future.

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On the other hand, a life insurance policy is a contract between a company (insurance provider) and policyholder in which the insurance provider ensures to pay a certain amount of money to the nominated beneficiary in case of the policyholder’s death during the term of the agreement. There are different types of insurance plans, and it is important for you to know the benefits of those plans such as a funeral, medical or some life expenses provided they are mentioned in the agreement.

Choosing the right insurance plan

If you’re about to select an insurance plan, you should consider some important factors:

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  • The time at which you start investing in a program and the number of family members you want to get insured. Obviously, a married man with two children has different needs compared to a single one. The number of persons who are dependent on an individual also varies from person to person.
  • The next thing you need to consider is you and your family needs. What are your child’s dream, your retirement plans, for how long would your dependents need financial support, any personal injury, etc. And do not forget those events or situations that will surely demand a huge sum of money.
  • The next thing one must consider is your current income. You should preferably choose a plan which you can afford.

Now you must be having a pretty clear idea of how to choose the best plan for you. Further, you should also compare various plans offered by different companies and numerous sites available online that help will you to compare them.

Differences between life insurance plans

Here’s a short brief of some plan categories you can choose according to your needs:

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  • Term Insurance Plan – You have to pay once, and your nominee gets the paid money under your misfortune demise. It ensures a person for a fixed time. If you survive the policy period, you do not get your premiums back.
  • Whole Life Policy – This plan continues for your lifetime. Under this, the policyholder has to pay regular premiums, until their death.
  • Endowment Policy –  In case the individual dies during the tenure, the beneficiary gets the amount assured. If the person survives the policy tenure, they gets back the premiums paid with other investment returns along with several other benefits.
  • Money Back Policy – In this a portion of the money invested is returned to the investor at regular intervals. If you survive the insurance term you get the entire amount back; else the beneficiary receives the entire sum assured.
  • ULIPs – These are the life insurance plans that offer you future security plus wealth creation options.

Many people do not opt for whole life policy and endowment policy because of the high amount of money you need to pay, while others may prefer to opt for these if they have a high life expectancy. Surely you will find the best one for you.

So what are you waiting for? Plan for your future and live a happier and carefree life today.

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Featured photo credit: aryehsampson.com via aryehsampson.com

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