Living on a fixed income in retirement can be a challenge. About 40% of retirees say they spent more during their first few years of retirement than they did while working. When you have more time on your hands to eat out, travel, and engage in hobbies, it can be hard to keep your spending in check. However, with some careful financial planning, you can live on a fixed income of 60K without feeling deprived. Here are our tips on how to retire well on 60K per year.
Move to a Cheaper State
Although 60K per year is a comfortable retirement income in many parts of the country, it may not be enough if you live in a state with a high cost of living. According to GoBankingRates, you’d need an income of $90,000 to $100,000 to live well in expensive areas like DC, New York, and California.
You can stretch your nest egg further by moving to a more affordable state like Texas or Wyoming. Since your housing costs will be cheaper, you’ll be able to enjoy some luxuries like travel and eating out during your golden years.
However, it can be hard to leave your current area if family and friends live nearby. An alternative to crossing state lines is moving to a 55 and over community in your city. They usually offer cheaper housing prices than regular neighborhoods, which can help reduce your monthly mortgage costs.
Get a Side Hustle
If you have big post-work plans like traveling the world, you may need to bring in extra money to supplement your retirement income. Getting a part-time job or starting a small business will give you more financial flexibility and allow you to enjoy a higher standard of living.
Not sure which side hustle is right for you? Here are some of the best part-time jobs for retirees according to Entrepreneur:
- Tour guide
- Babysitter or caretaker
- Pet sitter. You can try Rover Petsitter.
Build an Emergency Fund
Even during retirement, you should still have an emergency fund to cover unexpected expenses. You don’t want to be forced to withdraw extra funds from your investments if your car breaks down or you lose your part-time job.
Taking out more money from your retirement accounts than planned can cause your nest egg to run out in your twilight years. So you want to avoid dipping into your investments for emergencies as much as possible.
Financial experts recommend keeping between 3 and 6 months of expenses socked away in a savings account. That way you’ll have enough cash on hand to cover big home repairs, unforeseen medical bills, and anything else that pops up. Use an app like Digit to save for an emergency fund.
Be a Smart Shopper
Becoming a smart shopper can help you stretch your 60K income further and improve your lifestyle. One way to save money is to take advantage of senior discounts. Many stores, restaurants, hotels, cell phone carriers, and airlines offer discounts to people over the age of 65. Stacking your senior discount with coupons, storewide sales, and rebate apps like Ibotta and Fetch Rewards can help you save on essentials so you have more fun money.
Lifestyle creep is a common issue in retirement. But if you try to stay frugal and reduce your expenses, you’ll be able to live well on your nest egg and avoid running out of funds.
What are your best tips for retiring on a fixed income? Let us know in the comments section below!
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