Financial Tips for Baby Boomers Entering Retirement
By Jim McKinley
Baby Boomers, Retirement and Savings
There are many reasons baby boomers approaching their retirement years are frugal. For one, this particular population was raised by the spendthrift Greatest Generation and picked up a few things along the way. Add on that the boomer generation is growing larger and living longer than those of the past, and it’s understandable why those just now entering retirement are wary of running out of money. However, it is possible to balance saving and spending in retirement. Here’s how…
Divide and Conquer
As great as it is to see the lump sum of all your money in one place, keeping all your income bunched together makes you focus too much on saving. Instead, think like the squirrel that plants his acorns in different places to ensure they have various savings accounts they can access once winter arrives. Separate your different incomes and cover fixed expenses with those that have a certain level of assurance.
Divide your retirement funds into two categories: guaranteed and non-guaranteed sources of income. Payments from pension plans, annuities, and Social Security can all be considered guaranteed — any other sources of income such as 401(k)s, IRAs, or other savings are non-guaranteed. Your fixed expenses should be covered by your guaranteed sources. Reach to your non-guaranteed sources for anything else you want to buy. This way, you can rest easy knowing you will be safe, housed, and fed no matter what happens.
Every penny we spend goes back into the economy, which helps improve businesses and create jobs. You can do your part and save for the future by making smart shopping choices and finding discounts on the goods and services you use. Your purchases still fuel the wealth and prosperity of those around you, and you can still save money to have cash on hand in case of an emergency.
- While some retirees delay preventive care and withdraw from social activities, which can have serious health implications, preventive medical care and health services increase both the quality and longevity of a person’s life. And you can save money on quality care if you do your research. If it’s been years since you last compared healthcare premiums, shop around to find new healthcare coverage that’s more affordable than what you use today. Medicare Advantage plans can be found at that offer extra coverage for your vision, dental and medication needs.
- Looking to reap the health benefits of owning a dog in your retirement years? While you may have a specific breed in mind, there are millions of loving pups in shelters that would be lucky to come home with you. Adopt a dog instead of buying a purebred, and you’ll save a life on top of hundreds of dollars. This will also leave you with more money to buy essentials for your pet like a comfy dog bed (which you could get for under $20 at Target).
- Take advantage of senior discounts. They are in place to help those living on a fixed budget stretch their dollar further. Plus, you have every right to enjoy this benefit of growing older.
While saving money is great, just make sure you still have time to enjoy life. Instead of doing time-consuming chores around your house, consider hiring some help once in a while. For example, you can have your lawn mowed or bring in a professional cleaner on occasion (maid services typically charge between $122 and $240 in Asheville).
It can be hard to switch from saving every penny you make to withdrawing from your savings. It can be especially difficult for this latest generation of retirees who are expected to live longer than those before them. However, balancing spending and saving ensures baby boomers actively contribute to the economy, enjoy their retirement, and still have enough set aside for emergencies.
Photo Credit: Image via Pexels