There is no magic wand that will turn your retirement fund worth $85,000 into a million dollars, and being a millionaire shouldn’t be your focus. Ambassdaor Advisors knows there are far more important things than wealth when it comes to happiness. But from a purely financial perspective and for the purpose of discussion, let’s begin by having this goal at hand: how to feel like a millionaire without being one.
The most important thing to know is that the earlier you begin saving for retirement, the easier it will be for you to retire with a healthy nest egg. If you are behind in saving for retirement, it is essential to know when certain retirement milestones are, and not to miss them. You will minimize healthcare costs by meeting deadlines and managing your paperwork. You will also avoid paying more for Medicare parts B and D, because you enrolled late. If you combine these steps with maintaining a healthy lifestyle, you can enjoy a long and fruitful retirement.
If you are fortunate enough to find a career or a company with a 50% 401(k) matching fund, that would be a great start. Also, if you were to commit to saving $150 a month for retirement in your twenties and work until you’re 65 (with an average growth rate of at least 7 percent), you’ll be a millionaire. But for many, that ship has sailed, and the prospect of retiring without a change in lifestyle seems less than fulfilling.
One way you can increase your spending power in retirement is by reducing your cost of living now. There are a variety of housing alternatives including downsizing, where you reap the benefits of your investment and move into a smaller home, or buying a newer and smaller condo or townhome where repair costs are low, and utilities are minimal.
Retirees could also sign up for systematic withdrawals from their retirement accounts to prevent over-spending and to spread out their retirement dollars over a more extended period. This is also a wise move, if you plan on traveling, as you can live modestly until you visit other places here in the United States or abroad. Also, be sure to take advantage of senior discounts, as often as possible, to save money for more lavish items during your retirement.
All of these options have different merits, and any of these actions will stretch your dollar much further to make you feel like retirement isn’t itself a constraint. At any stage of your retirement journey, the team at Ambassador Advisors can help.
Any opinions expressed in this forum are not the opinion or view of American Portfolios Financial Services, Inc. (APFS) or American Portfolios Advisors, Inc.(APA) and have not been reviewed by the firm for completeness or accuracy. These opinions are subject to change at any time without notice. Any comments or postings are provided for informational purposes only and do not constitute an offer or a recommendation to buy or sell securities or other financial instruments. Readers should conduct their own review and exercise judgment prior to investing. Investments are not guaranteed, involve risk and may result in a loss of principal. Past performance does not guarantee future results. Investments are not suitable for all types of investors. To the extent that this material concerns tax matters, it is not intended or written to be used, and cannot be used, by a taxpayer for the purposes of avoiding penalties that may be imposed by law. Each tax payer should seek tax, legal or accounting advice from a tax professional based on his/her individual circumstances.