4 Big Ways to Stretch Your Retirement Funds

If you're like most Americans, you may be concerned that your retirement savings aren't on track.

May 18, 2014 at 8:45AM

They're coming. Your golden years, that is.

If you're like most Americans, you may be concerned that your retirement savings aren't on track. A poll conducted last month by Gallup revealed that 59 percent of respondents worry about not having enough money for retirement, making it the most cited worry in the survey.

Unfortunately for those nearing retirement, there may be too little time left to fully address a savings shortfall, and small lifestyle changes -- such as clipping coupons and eating out less -- may not be enough to make a real difference.

If it seems inevitable that you'll arrive at retirement with way less in savings than you should, these serious methods for stretching your dollars may help you avoid more painful changes to your lifestyle.

1. Delaying Social Security
If you're worried about your ability to meet basic expenses in retirement, the first move you should consider is delaying when you start drawing your Social Security retirement benefits.

"Hold off on claiming Social Security if you can," says Tracy Ann Miller, CEO of Portfolio Wealth Advisors in Oklahoma City. "You are eligible at age 62, but deferring your payments can boost your checks down the road. Even waiting four years to collect Social Security could make a difference of about $300 per month."

It may seem counterintuitive that not collecting Social Security can stretch your retirement money, but it's true. In your mid-60s, you are more likely to be able to continue working part-time, if needed, to sustain your lifestyle. Then, when you are ready to call it quits for good, you can start collecting Social Security and receive significantly more per month than you would have had you started at a younger age.

Some choose the approach of filing for benefits at their full retirement age and immediately suspending them, which allows their eventual monthly payments to continue to grow until age 70 while enabling their spouses to claim spouse's benefits in the meantime. But this strategy has recently come under fire from critics in Congress, so retirees who want to try it may want to hurry.

2. Downsizing your house and toys
If you want your retirement money to last as long as possible, you need to stop using it to maintain homes and items that aren't essential to your current lifestyle.

"I always force people to look at their expenses," says Nick Scheumann, a wealth advisor with Hefty Wealth Partners in Auburn, Indiana, when asked how he advises those nearing retirement age.

Homes that were perfect for a family full of kids may be extravagant and unnecessary for empty-nesters. When no one is working, two cars may no longer be needed, and if it's been years since you've gone to the lake, it could be time to sell the boat.

Scheumann recommends pre-retirees conduct a dress rehearsal of their retirement a few years before they quit their jobs. By living only on their expected retirement income, they can figure out in advance if they need to make any serious adjustments. Plus, they can put the remaining money from their paychecks into savings to beef up their cash reserves.

3. Stopping handouts to the kids
If you're approaching retirement with thin reserves, it's critical to stop acting as your adult children's personal bank.

"I see a lot of my clients underestimate the effect of giving money to their kids," says Miller. "Even $100 here or there can eat into your savings, and you may have to alter your lifestyle in retirement."

If you have adult children you know need money and you feel obligated to help, budget a specific amount. When they hit the limit, be direct and tell them you are simply out of cash to share for the month. Also, be wary of boomerang children who come home and overstay their welcome.

"If your adult children move back home, ask them to pay rent," advises Miller.

4. Getting moving and eating your veggies
The last way to stretch your retirement fund has nothing to do with money management. Instead, it's about making smart lifestyle choices that will keep you healthy -- and out of the doctor's office.

"Healthcare is one of the biggest expenses in retirement," says Miller. "It will cost the average couple about $250,000. Eating a balanced diet and exercising can help cut down on out-of-pocket medical expenses."

But if there's still time...
If you're not on the doorstep of retirement, simply increasing your savings effort may allow you to sidestep these moves and still live comfortably. Be sure to take full advantage of your employer-based retirement plan (particularly if your employer matches your contributions) and other tax-advantaged retirement accounts, and considering saving even more in additional savings accounts if possible.

Then, if you decide to make these changes anyway, those extra funds will simply be there to help you enjoy your retirement even more.

This article 4 Big Ways to Stretch Your Retirement Funds originally appeared on MoneyRates.com.

How to get even more income during retirement
Social Security plays a key role in your financial security, but it’s not the only way to boost your retirement income. In our brand-new free report, our retirement experts give their insight on a simple strategy to take advantage of a little-known IRS rule that can help ensure a more comfortable retirement for you and your family. Click here to get your copy today.

You may also enjoy these financial articles:

America's best savings and money market rates

Best states for retirement

Interest rate forecast 2014

Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Money to your ears - A great FREE investing resource for you

The best way to get your regular dose of market and money insights is our suite of free podcasts ... what we like to think of as “binge-worthy finance.”

Feb 1, 2016 at 5:03PM

Whether we're in the midst of earnings season or riding out the market's lulls, you want to know the best strategies for your money.

And you'll want to go beyond the hype of screaming TV personalities, fear-mongering ads, and "analysis" from people who might have your email address ... but no track record of success.

In short, you want a voice of reason you can count on.

A 2015 Business Insider article titled, "11 websites to bookmark if you want to get rich," rated The Motley Fool as the #1 place online to get smarter about investing.

And one of the easiest, most enjoyable, most valuable ways to get your regular dose of market and money insights is our suite of free podcasts ... what we like to think of as "binge-worthy finance."

Whether you make it part of your daily commute or you save up and listen to a handful of episodes for your 50-mile bike rides or long soaks in a bubble bath (or both!), the podcasts make sense of your money.

And unlike so many who want to make the subjects of personal finance and investing complicated and scary, our podcasts are clear, insightful, and (yes, it's true) fun.

Our free suite of podcasts

Motley Fool Money features a team of our analysts discussing the week's top business and investing stories, interviews, and an inside look at the stocks on our radar. The show is also heard weekly on dozens of radio stations across the country.

The hosts of Motley Fool Answers challenge the conventional wisdom on life's biggest financial issues to reveal what you really need to know to make smart money moves.

David Gardner, co-founder of The Motley Fool, is among the most respected and trusted sources on investing. And he's the host of Rule Breaker Investing, in which he shares his insights into today's most innovative and disruptive companies ... and how to profit from them.

Market Foolery is our daily look at stocks in the news, as well as the top business and investing stories.

And Industry Focus offers a deeper dive into a specific industry and the stories making headlines. Healthcare, technology, energy, consumer goods, and other industries take turns in the spotlight.

They're all informative, entertaining, and eminently listenable. Rule Breaker Investing and Answers are timeless, so it's worth going back to and listening from the very start; the other three are focused more on today's events, so listen to the most recent first.

All are available for free at www.fool.com/podcasts.

If you're looking for a friendly voice ... with great advice on how to make the most of your money ... from a business with a lengthy track record of success ... in clear, compelling language ... I encourage you to give a listen to our free podcasts.

Head to www.fool.com/podcasts, give them a spin, and you can subscribe there (at iTunes, Stitcher, or our other partners) if you want to receive them regularly.

It's money to your ears.


Compare Brokers