The American dream used to be working a job, getting a retirement account, buying a house, retiring at 55, and living the rest of your life with income from that account. Well, today is a much different story. With prices increasing and inflation making our money worth less and less every year, people can’t solely rely on their retirement accounts and must find other sources of income to supplement their expenses. In this article, we will be discussing some of the retirement accounts available, some of their benefits and drawbacks, and what it is like to live on fixed income.
For a long time, Americans believed that their Social Security money was just part of their retirement accounts, but more and more retirees are having to rely on the Social Security Administration to live off of and pay their bills. Many who have fixed incomes receive Social Security Disability payments. Social Security is helpful, but it should not be the only income you have. There are ways to help create extra income for yourself.
There are a few other retirement accounts which one should consider BEFORE the retirement age approaches. If you’re already at that age, or already retired, the second part of this article will provide some tips for living on fixed income, but for now, we will discuss the other retirement account options.
The following are seven different retirement accounts to consider:
- Health Savings Account(HSA)
- Independent Retirement Account (IRA)
- SEP IRA
- Simple IRA
- Roth IRA
- Solo 401(k)
- Traditional 401(k)
Living On Fixed Income
With prices rising in all areas of our lives, it is difficult to live on a fixed income. Here are some tips on what to do, and even where to live to make the most out of your fixed income situation. Some of these may not seem like “financial advice”, but they can have a financial impact on your life if done correctly.
- Cook your meals: If you plan correctly, you can stretch your money enough to surpass the amount of food you could purchase by eating out. If you ate out one time every day for 5 days, you could spend up to $100. With a hundred dollars you could eat for a few weeks, cooking your own meals.
- Remove addictions: Things like alcohol and cigarettes cost a lot of money. Get rid of them. Save your money for something better for yourself.
- Become more social: Being more social will reduce a lot of stress from your life. It is better to have a few friends, and a fixed income, than no friends and a whole bunch of money. Get back to having fun with your friends, and who knows, maybe a new business venture will rise out of it.
- Walk: Using your car or public transportation less, will not only save you money on gas and bus or taxi fares, but it will also improve your health, which can have many different benefits with your social and financial life. You will fee more vibrant, and if you make it a morning habit, your energy will be amazing throughout the day.
- Eat better: This falls in line with the previous statements. Eating fast food every day may seem inexpensive, but in reality, it’s almost the same price as other places and takes a toll on your health. Save some money and eat a few pieces of fruit instead.
- Sell your vehicle(s): If you sell your vehicle, you will have some money to use, and it will force you to walk, which will improve your health.
- Optimize your living situations: If you have to downsize, do it.
We discussed what retirement accounts are and how they are being used more often as the primary, or only source of income. We gave a bullet list of different retirement accounts to consider. If you’re looking to find a town or a city that is less expensive to live in, start searching and getting information and, possibly, make a move. Do some research and find areas that can make your dollar stretch.
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