Did you know that the average retiree in the USA overspends by just over $7,000 annually? This happens to many people when they take the spending habits they had in the working world into their retirement years.
Luckily, there are many costs and expenses associated with working life that you don't have to carry into retirement. This means that there are many measures one can take to improve their retirement finances.
You only need to save a few hundred dollars per month to make up the average shortfall. Learn some of the secrets to senior living community affordability in this quick guide.
The most crucial method for saving money in senior care is to eliminate any outstanding debt you have. Unless you're one of the very few people still using debt to build wealth, all debt past retirement can be considered bad debt. This is because the cost of servicing the interest can have a disproportionately bad effect on fixed incomes.
The best way to get rid of debt is to pay the smallest accounts off first and then gradually work through the larger debts. If you have an unusually large amount of debt, consider talking to a financial expert about restructuring your debt. You can also downscale and put the proceeds and savings towards paying your debt off faster.
In the long run, the cash you have available monthly will increase. You will also no longer be vulnerable to unexpected interest rate shifts.
Seniors tend to downscale for various reasons. They either no longer need what they used to, they can't take everything they used to pay for into the retirement home, or their income decreases when they retire.
Downscaling has a unique savings advantage and can even lead to less stress. There are a few common things you can target to downscale without diminishing the quality of your life.
The first thing you can do is audit your life to find out if you're still paying for phone contracts, club memberships, or other services you won't need during retirement. This is a rather important step because unscrupulous agencies will keep debiting your account without your knowledge long after you've stopped using their services.
The next step is to eliminate money eaters, such as boats that are expensive to maintain or big or old vehicles. You don't have to sell them; you can gift them to a family member or friend if they're willing to take them. The idea is to take the responsibility for maintenance off your hands.
One of the myths about retirement living communities is that it's cheaper to get everything you need at home. The financial magic of cost-effective retirement living is that it aggregates the costs of many different expenses into one bill, kind of like buying something in bulk. The effect is that the price of each individual service is suppressed.
In many cases, you would have been paying for a version of these services before retirement. For example, you may have had to pay for home security, but the retirement community now takes care of that for you.
You can plan to downscale by looking for affordable senior housing that includes extra amenities you are currently paying for. These can range from communal dining that replaces meal preparation to a fitness program that replaces the need for a gym membership.
The plethora of senior discounts available across society does a lot of heavy lifting when it comes to budget-friendly senior living. The combined power of using those discounts can cut an average of 10% off of all the purchases you make. That alone can speed up your ability to pay debt off or can go towards other useful senior living expenses.
If budgeting and saving feel overwhelming, speaking to a financial advisor about your concerns is a good idea. Specially trained professionals who deal with finances daily have valuable insights, expertise, and skills. They may give you pointers or go so far as to help you with complex admin and paperwork.
There are more tax breaks available to senior citizens by virtue of their place in society. Earning a lower income or downscaling may also bring you into eligibility for tax breaks you wouldn't have had access to before.
A financial expert can help sift through your finances to see which tax breaks you may be eligible for at both State and Federal levels. They can then help you prepare your tax return so that you can take advantage of those tax breaks. Getting expert help is vital because mistakes can be extremely costly.
Financial experts are also wizards at structuring budgets well. They can help you find services, time payments, and cut costs in ways that the average person may never be able to do. This type of service can also be useful for people who want to downscale but don't know what to prioritize.
Assets like cars, boats, and houses can be a financial drain, but they can also earn money for you in various ways. Real estate, for example, can be let to tenants and thus produce monthly income. Speaking to a financial advisor may help you see unique opportunities for your assets that could help you extend your budget.
Planning for senior living community affordability is a vital part of a stress-free retirement, and the steps to get you there are one hundred percent achievable. Getting rid of debt and downscaling are the two simplest ways of attaining your financial goals.
Simple may not always translate to easy when it comes to finances, which is why getting expert help may be a brilliant idea. Also, don't forget to use your tax breaks and seniors' discounts.
Addington Place offers excellent value-for-money assisted living and care services right here in Des Moines. Get in touch with us today to find affordable and comfortable senior living options.