Retiring often means saying goodbye to the daily 9-to-5 grind and saying hello to living out your golden years. The average retirement age is 65 for men and 62 for women, according to the most recent data from the Center for Retirement Research at Boston College. However, retiring at any age requires a lot of financial planning and adjustments to your savings plan.
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When it comes to your retirement income, every little bit helps, whether that’s Social Security benefits, Roth IRAs, brokerage accounts, estate planning or even extra passive income you’re earning. What you’ve managed to save for retirement will directly combat increases in housing costs, transportation costs or even what you spend at the grocery store. It can be so overwhelming figuring out what to spend your money on that you may overlook where you can cut back.
Here are some insights on five expenses to cut in retirement that might be holding your savings account back.
For Maxime Bouillon, CEO of Archie, dining out was a major contributor to a slow-growing retirement fund. While you don’t need to live like a hermit before you reach full retirement age, cutting back on extraneous spending and being intentional with splurges is a good idea — and key to beefing up your savings.
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“Regularly eating at restaurants and ordering takeout had an impact on my retirement savings,” Bouillon said. “Although it was fun at the time, these costs accumulated rapidly, often exceeding the expenses of meals. If I had dined out less, I could have put hundreds or even thousands of dollars each year into my retirement account. On average, American families spend $3,459 annually on dining out, which could add up to an amount over years if invested for retirement purposes.”
Cut out the midnight DoorDash orders and save the splurges for birthday dinners and special occasions with family and friends. That way, you can prioritize spending on events that create long-lasting memories instead of feeding short-term spending habits.
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The dopamine hit from impulse spending is real, and saying no to great deals, small purchases and instant gratification isn’t easy. However, these little splurges can seriously derail your retirement plans. You don’t want to get to 65 and realize you could have been a lot more comfortable if you had tweaked a few things in your forties.
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