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How to survive retirement and stretch out your savings

by , 14 October 2014

When you've only got a few years to go until retirement, every rand counts. Your main priority should be to increase those retirement savings.

What is unfortunate is that most retirees run out of money ahead of time, especially if they keep their preretirement lifestyles.

The best way to survive retirement without running out of money is learning how to stretch out your savings and how to make this money work in your favor.

Here are a few tips on how to face the biggest challenge of retirement: making your retirement savings last longer.
Tip #1: Work beyond retirement
Working past retirement age not only allows you to stretch out your retirement savings, it also gives you a sense of purpose and a reason to remain active for longer.If you have a job you really enjoy and you still feel capable of working, then this is one of your best options.
Tip #2: Recalculate your retirement needs
Your retirement needs may change in time. Experts say that you need around 80 percent of your preretirement income to live comfortably during retirement, but this percentage varies, depending on your lifestyle and needs. If you are running low on retirement savings, it may be time to reanalyze your retirement needs.
Tip #3: Rebalance your portfolio
You should aim to rebalance your portfolio on a regular basis, to make sure that your retirement investment portfolio provides the best benefits. You can try to increase your savings by investing in more equities or by adding more annuities to your portfolio.

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Tip #4: Consider downsizing
If your home is larger and you don’t need all the extra space after you’ve retired, then downsizing can be a viable option. You can consider moving into a smaller home, in a smaller town, where living costs are lower. This would allow you to stretch out your retirement savings, although it would entail some more significant lifestyle changes.
Tip #5: Create a budget and a withdrawal strategy   
Talk to a financial planner and review your withdrawal strategy, so you can manage to cover expenses. It’s also important to create a monthly budget so you don’t end up overspending.

How to survive retirement and stretch out your savings
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