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Making The Most Of Your Retirement Nest Egg

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Making The Most Of Your Retirement Nest Egg

Retirees are happiest when they’re spending money socializing with others, according to a study reported by CNBC. However, a recent report found that retirees aren’t spending enough of their nest eggs. A fear of running out of cash to pay for things such as medical expenses is making retirees too frugal. But is there a way to enjoy the best of both worlds?

Set money aside

The average retirement nest egg ranges from $83,500 to $177,500, depending on location. One of the main reasons why retirees don’t like to spend their cash is because they worry about their health and whether they’ll need to move into a nursing home. The average annual cost of a private room in a nursing home is $106,000. By setting aside this figure, you’ll know you’ll have enough should you need it. Put the cash in a high-yield savings account and it will gradually grow without any further contribution from you.

Spend more 

The longer you delay claiming your Social Security retirement benefits, the more you’ll get each month. Every full year you wait after the retirement age, the figure goes up by 8%. This means you’ll have to rely on your nest egg for a while, but it’s worth it in the long run. You could use your hard-earned savings to enjoy a vacation overseas with friends and family. Any cash leftover from your trip could be put towards making over your home. Another option is to invest in a second property. Opt for one overseas and you’ll get to enjoy regular low-cost vacations and be able to rent it out to make extra cash.

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Give yourself a regular income 

A recent study found that retirees who received more of their income in regular payments spent more than those that received less as a regular payment. Make sure you enjoy all the money you’ve earned over the years by ‘paying’ yourself a lump sum each month. The general rule is that you need 80% of your pre-retirement annual income to survive. Look at your total nest egg amount and divide it out into a yearly and then monthly amount. Make sure the monthly amount covers the cost of your essential outgoings, then treat yourself to meals out, new clothes, and fun activities. 

Having a sizable nest egg to fall back on during retirement is essential. But don’t forget to make the most of it by following the advice above.

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