- January 6, 2023
- Posted by General Electric Credit Union
- 4 read
Running Out of Money in Retirement? Here Are Your Options
If you’re running out of money in retirement, don’t panic. Now is the time to reevaluate your needs and determine the solution that’s right for you. Review the following options, then sit down with a financial advisor to chart a course to a more secure financial future.
Steps to take if you’re running out of money in retirement
1. Slim down spending
While you may have budgeted for retirement, it’s possible you underestimated how much you’d need to maintain the standard of living you wanted. Or life may have thrown you an expensive curveball, such as an unexpected illness. Either way, the money may have run out faster than you expected. Now, it’s important to create a realistic budget moving forward. Consider:
- If you need a reality check. Is the standard of living you want also what you can afford? For example, maybe you’ve been taking multiple vacations a year. Instead, consider decreasing the frequency of trips to save money.
- If you need to make small changes. Whether it’s preparing your coffee at home or eating out less, there are many ways to cut back on unnecessary spending.
- If you need to make big changes, too. If you’re evaluating your budget and find that small changes alone won’t cut it, it may be time to think about viable big changes that would keep more money in your pocket over the long term. For example, if you live somewhere with a high cost of living and you’re able, entertain the idea of relocating to somewhere more affordable.
2. Get a part-time job
You spent the better part of your life working so you could enjoy not doing so in your golden years. Unfortunately, if you think you’re about to run out of money in the near or far off future, it may be smart to give working another shot. A part-time job may bring in the additional income you need to bridge the gap. Brainstorm what this could look like based on your physical fitness and interests. For example, if you’ve created a beautiful garden during retirement, your green thumb may come in handy at a part-time job at a nursey.
3. Get rewarded for your balance
If your money is currently sitting in accounts that don’t earn interest, you may be missing out. Your options to earn off your balance include:
- High-yield checking accounts. Some checking accounts have different rate tiers that reward you with a better annual percentage yield (APY) as your balance grows. It’s an everyday account that keeps your balance accessible and growing.
- High-yield savings accounts. Unlike a checking account, the funds in a savings account may sit for longer. This additional time will help you get the most out of compounding interest in a high-yield savings account.
- Certificates. If you’re comfortable locking away your funds in exchange for an even better rate, consider a certificate. These are to credit unions what certificates of deposit (CDs) are to banks. They operate the same. You deposit money into the account, let it sit and accrue interest over a set period, then enjoy guaranteed earnings that can be withdrawn or reinvested into another certificate. Just be sure not to withdraw the funds before the certificate’s maturation date, as this will trigger a penalty.
If you’re anxious about your current financial standing in retirement, General Electric Credit Union is here to help in any way we can. From interest-earning checking and savings accounts to certificates and budgeting tools like Money Management, we have solutions with your best interests in mind. Plus, our members have access to a no-cost consultation with a CFS financial advisor1 through Investment Services. Visit us online to learn more and schedule your consultation today. Together, we can help make your golden years more financially fulfilling.