10 Ways To Make Your Retirement Savings Stretch Further

When it comes to retirement, saving is key. Many people save in the years leading up to their retirement in order to ensure that they can live out the rest of their days comfortably without depending on a salary.

However, living on a finite amount of money can be daunting, making budgeting during retirement a necessity. In order to live comfortably and without financial strain, many retirees have turned to cost-cutting measures that will help their nest egg stretch a little bit further.

Here are 10 strategies that retirees can use to spread their savings a little bit thinner.

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Home Choices

One of the first things many retirees do is to downsize, and for good reason. Once all of their kids have moved out on their own, many people find that the costs and work associated with keeping up a family home are no longer worth the benefits.

Downsizing to a smaller home typically means lower property taxes, smaller utility bills and less time spent on cleaning and maintenance. For retirees who have a case of claustrophobia, downsizing doesn't always have to mean going much smaller. Now that their kids are away from home and work is a distant memory, things like which school is nearby and length of commute to the nearest city are a bit less important, so moving into a new home in a less expensive neighborhood is also an option.

Another option that retirees who are ready to leave their family home behind might also consider is moving to a state with better tax benefits for seniors. While a move to Alaska, the state with the friendliest tax system for retirees, may be out of the question, other states like Wyoming, Nevada, Mississippi and Georgia also boast favorable tax schemes for seniors.

Retirees who live in places like Vermont, Connecticut and Rhode Island might consider moving to another area, as those states' tax systems will take a much larger chunk out of their savings.

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For retirees with a sense of adventure, becoming an expat and living overseas could also cut down on costs.,/p>

While the process of gaining a visa to live in another country can be arduous, American expats often find that the cost of living is much lower in other countries than it is in the United States. Healthcare, transportation and housing is much cheaper in many nations, especially in places like South America and Asia.

Retirees would have to take into consideration the cost of moving and gaining a residency permit as well as the cost of their visits back to the United States, but for many living life abroad is a viable and often cheaper option.

Budgeting

One of the biggest challenges that retirees face is ensuring that they have enough money to pay for unforeseen costs that may arise toward the end of their lives.

Medical bills can really add up, so a budget is an absolute necessity. Most financial planners estimate that in order to maintain one's current lifestyle beyond their working years, they should plan to use between 70 and 90 percent of their pre-retirement income.

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However, everyone's needs are different and will depend on a variety of factors. One of the biggest factors for retirees' financial needs is whether their mortgage is paid off. Having no mortgage takes a huge expense off the table, and no longer working means fewer commuting costs.

On the flip side, other costs such as healthcare are liable to increase as time goes on, so it is important to budget for the future. One of the best ways to ensure retirement funds will last is to plan out monthly and yearly spending and keep a comfortable cushion for worst-case scenarios.

Having free time to pursue old hobbies isn't the only perk of retirement, many retailers and restaurants offer senior discounts, which make the cost of living in any state lower. Those 65 and older are often entitled to a 10 percent discount on everything from apparel to vacations. Groups like the AARP keep up-to-date information regarding the deals available for seniors, and many merchants have unadvertised discounts as well – it doesn't hurt to ask before paying full price.

Saving on shopping and transportation isn't the only way to take advantage retirement perks either — understanding the local and state tax code can also save retirees thousands, as many states offer deductions and tax credits for seniors.

Waiting as long as possible to take out Social Security benefits can also boost retirees' nest eggs as well. Holding out for just two years can increase Social Security benefits by more than 15 percent, and living off of your savings alone for four years after the retirement age boosts Social Security payments by 33.3 percent.

Budgeting for retirement can be daunting because it requires people to estimate how many years they will need to plan for and what kind of lifestyle they will be living 10-15 years down the line.

Many financial planners encourage people nearing retirement age to test out the retirement lifestyle they are planning in order to make sure it's a good fit for them before committing completely.

Some expect that quitting their job and moving into a one bedroom apartment on the beach will provide them with peace and tranquility, but find that after a week they are going stir crazy. To avoid making costly mistakes, potential retirees are encouraged to "practice" living the way they plan to for extended periods of time, whether that means taking a long vacation to their preferred retirement destination or cutting back to see what their retirement budget will afford them.

Many people find that the amount they've planned to withdraw from their retirement savings each year significantly changes their lifestyle and could push them to rethink their options.

Income Sources

Being retired doesn't necessarily mean there isn't any money coming in. In fact, a financially savvy retiree should be putting their money to work and generating some type of income.

Producing a return on investments is key for retirees who want to keep a steady stream of income when their working years have ended. However, investment strategies should change significantly during retirement, as asset protection becomes a much higher priority.

While growth stocks typically produce higher returns, the risk is much higher as well, and often doesn't represent a good opportunity for those approaching or enjoying retirement. Instead, many retirees choose low-risk investments like bonds, dividend stocks and value stocks to round out their portfolio. Another thing to consider when investing retirement money is liquidity. It's important to keep in mind when and how much money will need to be withdrawn from your account each year, as some securities take a long period of time to be liquidated.

There are many different options when it comes to working beyond retirement, but not everyone is able to do it. Around 65 percent of Baby Boomers are planning to continue working past age 65, something that will boost their savings and increase their Social Security benefits.

For every month between 65 and 70 that a retiree delays taking out Social Security, they receive more money. However, for many it's difficult to maintain their current job because of physical constraints or a lack of competitiveness with younger candidates. Many employers allow phased retirement, in which people slowly transition to part time roles before retiring completely, a good option for people looking to continue working past 65.

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Donating unwanted items often qualifies retirees for a tax deduction, something that can be beneficial for those who continue to earn an income after they've retired. Not only will selling and donating unused items generate a bit of extra cash, but doing so will also lower upkeep costs as it makes for less clutter to clean and manage.

Many retirees opt to sell one or both of their cars if they move to a retirement village or condominium. Doing so earns them the value of the car and also significantly reduces their expenses as they will no longer pay insurance, fuel and maintenance costs for the sold vehicle.