How to Survive a Low Income Retirement
Ways to Reduce Living Expenses and Earn an Extra Retirement Income
Aug 28, 2009
A low income retirement is a worrying reality that many retirees' fail to adjust to. A study by Ernst and Young revealed that as many as 3 in 5 retired people will struggle to maintain their lifestyle without managing money more effectively.
Budgeting Help
Saving money is a lot easier than making extra retirement income. Prepare for a low income retirement through improved budgeting. Put together a simple spreadsheet and document all sources of income and expenditure. If there is a shortfall, identify ways to reduce the amount of money spent.
- Switch to generic food brands, take advantage of 2 for 1 offers and buy perishable goods from the discounted foods section. Most stores have a tendency to reduce prices at the same time each day; finding out when this happens can reduce the cost of groceries considerably.
- Use a price comparison site, such as moneysupermarket.com, to compare the prices of all household bills. Saving money on utility bills and insurance products is possible. Paying on a monthly basis is more convenient, but paying for the full year will often prove cheaper.
- Reduce gas and electric bills by only heating the room that most time is spent in. Many retirees' waste money by heating their entire house when they rarely enter other rooms. Ensure that the house is properly insulated in order to prevent the loss of heat.
Extra Retirement Income
Prevent a low income retirement by taking a part-time job or doing some freelancing. Whilst managing money is easier than making money, this isn't always sufficient. If government financial assistance is not available and local companies aren't forthcoming with job offers, self-employment and other miscellaneous money-making opportunities could provide the answer.
- Write a blog for a website, do some pet sitting, dog walking or become a registered childminder.
- Make extra cash by taking in a lodger or renting out a driveway that isn't needed.
- Sell household goods on eBay or at a car boot sale for a tax-free income.
Delay Retirement
Continue working for several years to help prevent a low income retirement. Delaying the age of retirement for a few years is incentivised by most governments. Talk to the pensions department to find out how much extra retirement income this change will yield.
Retirement Investments
Make an annual check to ensure that retirement investments are fully optimized. An investment that provided a good return 12 or 24 months ago may not do so in the current market.
- Move money from current accounts to deposits accounts, bonds and higher yielding investments in order to boost retirement income.
- Talk to an Independent Financial Advisor (IFA) to see if any investments need to be moved.
Whilst there will always be those who are better-off, it is possible to make the most of a low income retirement. Seek bargains and optimise any investment money that is available. Talk to a financial advisor and consult appropriate government departments to see if they are able to provide financial assistance or budgeting help.
Sources
Santiago, Steve. 25 August, 2009. "7 ways to stretch your retirement income." The Boston Globe.
Disclaimer: This article in no way attempts to give legal or tax advice. One should consult a licensed attorney, tax advisor, or other qualified professional.
 |
 |
 |
 |
 |
