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The question of how to squeeze extra money out of a fixed income budget has long perplexed both advisors and their retiree clients. The answer is of course not simple, but most people fall into one of two categories — those who can draw on retirement accounts and those who cannot.
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For Those Who Have Social Security — and That’s Kind of It.
A whopping 40% of Americans rely solely on Social Security for their income after the age of 65. How? Well, luckily for this group social security will likely be funded for the remainder of the time they will require it. Additionally, Medicare also covers the majority of healthcare costs.
But what if a Medicare supplement is needed? An unexpected health cost? A repair needed on an older home? The reality is, there is always something that extra cash will be needed for. For this group of retirees, the goal of building an emergency fund will be a little more challenging. Here are some ideas for those with a home and those without to boost their savings.
For Those Who Are Not Homeowners
This group will need to get the most creative. The first step is cutting down expenses. It is likely expenses are already not terribly high, but getting rid of subscriptions, cable and negotiating phone bills are all effective ways of trimming down the budget to reclaim money that can be put into an emergency fund.
Another popular method people in this category utilize — maximizing the assets you do have. You might look around your things and think they are not valuable, but selling old pieces of furniture or jewelry you have no particular need or use for anymore can give you what you need to start a rainy day fund.
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How much you’ll have if you invest $1,000 per month until you retire
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Another great option is to take advantage of skills you have built throughout your life. Have a hand at painting? Cursive? Or book editing? …….
