The best way to ensure against outliving your TSP nest egg is to make an effort to manage your spending in retirement. Current studies show some retirees spend more money than they did when they were working – especially during the first couple of years when every day feels like a weekend. That’s why it’s important to track your spending and stick to a reasonable retirement budget.
Use A Budgeting App To Track Your Finances
You can set up a budgeting app to capture information from each of your accounts and make it available on one dashboard. This enables you to view real-time information for your bank accounts and credit cards to help manage day-to-day spending. Even before you retire, a budgeting app can help you estimate how much you’ll need to cover your essential monthly expenses when you separate from service.
“Cancel that gym membership and find a free walking group for seniors in your area. No luck? Then start one of your own and make new friends.”
Find Better Deals On Just About Everything
If your bank charges monthly fees, look for fee-free or low-fee checking accounts with no required minimum balance and a better interest rate on savings. Also consider a credit union. Since credit unions are co-ops, there aren’t any outside shareholders seeking profits. Online banks are another option because they don’t have the overhead of maintaining and staffing local branches.
Shop around for less expensive internet and cell phone services. Many providers offer you a nice discount if you bundle both. If you have a landline you rarely use, consider turning it off to save even more. Cancel that gym membership and find a free walking group for seniors in your area. No luck? Then start one of your own and make new friends.
Consider Downsizing Your Home To Save More
An AARP survey indicates that over 70% of adults age 50 and older want to remain in their homes in retirement. However, there are financial factors to consider. Even if your mortgage will be paid off soon, home maintenance can get expensive over the years. As you grow older, you may have to start paying for services you used to do yourself like mowing the lawn or washing the windows.
As the years go by, you’ll likely need to replace appliances, install a new roof and pay out-of-pocket for other home repairs. Property taxes and homeowners insurance will also rise over a 25-to-30-year retirement. If you sell your home, you can use part of the proceeds to buy a smaller home and add the rest to your retirement nest egg.
If you need help creating a retirement budget, touch base with an FRC® trained advisor.
