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Do you need to save 1 million dollars or more to afford retirement? Or can you enjoy your golden years without seven figures in the bank?
The belief that workers must save a cool million to retire comfortably has been repeated so often it has become a cliché, but is that old bromide really true? Do you really need to accumulate a million-dollar nest egg to enjoy your golden years? Or can you enjoy a comfortable lifestyle without seven figures in the bank?
While some workers will indeed require a million dollars to accommodate their chosen lifestyle, others may not need that much. In the end, it all boils down to your needs and the accommodations you are willing to make. Here are survival strategies that could help you enjoy your post-work years even if you fail to hit that million-dollar target.
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Cut Your Kids Loose
One of the most common mistakes retirees make is spending too much supporting their grown children. While the temptation to help out your struggling kids is certainly understandable, doing too much could put your own financial security in jeopardy.
If your kids are making an honest effort and working toward a sound financial goal, a little help here and there will not hurt – as long as you can afford it. But if you are giving your grown children a handout instead of a hand up, it may be time for a little tough love.
Downsize Your Home
Even if you end up short of that much-vaunted million-dollar savings goal, you may have more money than you realize. Now that you are done with work and the kids are on their own, you can downsize into retirement and pocket the equity you have spent a lifetime building.
Selling your current home and downsizing into a more modest property could free up hundreds of thousands of dollars in extra cash, money you can save, invest and use to get you that much closer to your original post-retirement savings goal.
Seek Out Free Entertainment Options
Retirees have a lot of free time to fill, and filling it can be an expensive proposition. A weekly movie could set you back several hundred dollars a month, and going to concerts and plays could cost even more.
Luckily, you have a wealth of low-cost and free entertainment options at your fingertips – and plenty of time to seek them out. Your local library is a great source of free books, along with movies, lectures, and other entertainment options. You can use the money you save to enjoy a nice dinner out – or squirrel it away for a rainy day.
Take Advantage of Travel Deals
Now that you are retired, you can choose when and how you travel. That means you can sign up for all those last-minute travel sites, the ones that offer deep discounts in exchange for flexibility.
Whether you love to cruise or crave adventure travel, you can find real bargains when you are not constrained by work schedules or tied down with the kids. You can save even more if you are willing to settle for less luxurious accommodations or stay with out-of-town friends and relatives.
Knowing that you can retire on less than a million dollars can give you peace of mind, but that knowledge can also jump-start your investment strategy. Some workers find themselves so intimidated by that seven-figure target that they give up on saving and investing altogether, short-circuiting their dreams of a comfortable retirement before they start. Taking a more realistic approach to your post-work years could spur you to save, so you can reach your own personal goals instead of reaching for a less attainable milestone.
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About the Author
About the Author
Brian Thorp
Brian is CEO and founder of Wealthtender and Editor-in-Chief. He and his wife live in Austin, Texas. With over 25 years in the financial services industry, Brian is applying his experience and passion at Wealthtender to help more people enjoy life with less money stress. Learn More about Brian
To make Wealthtender free for readers, we earn money from advertisers, including financial professionals and firms that pay to be featured. This creates a conflict of interest when we favor their promotion over others. Read our editorial policy and terms of service to learn more. Wealthtender is not a client of these financial services providers.
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