The traditional retirement plan is to save as much money as possible during your working years so that you can then spend it during your retirement. But what if there was a better way?
What if, instead of trying to save as much money as possible, you aimed to save enough money to cover your essential expenses and then spent the rest of your money freely?
This is the new retirement plan. Under this plan, you would save almost everything and spend virtually nothing in retirement. Here’s how it would work.
The old retirement plan
The old retirement plan used to be quite simple. You would work for 40 or so years, saving as much as you could. Then, when you retired, you would downsize your life and live off your savings.
This plan worked well for many people. But it had a few drawbacks. First, it assumed that you would stay healthy throughout your retirement and not have any major health problems. Second, it assumed that you would have a pension from your job that would supplement your savings.
Pensions are becoming increasingly rare, however, and people are living longer, which means that they need their savings to last them longer as well. As a result, the old retirement plan just doesn’t work as well as it used to.
The new retirement plan
The new retirement plan is to save almost everything and spend virtually nothing. This may sound like an impossible task, but if you start now, you can make it happen. The key is to live below your means and invest the difference.
Save almost everything
Save almost everything
For years, the standard retirement advice was to save 10-15% of your income. But if you want to retire comfortably, you may need to save much more.
A recent study by Fidelity Investments found that the average 65-year-old couple will need $280,000 to cover healthcare costs in retirement.1 And that’s on top of the money needed for food, housing, and other living expenses.
If you start saving early and invest wisely, you may be able to reach your retirement goals. But it’s important to understand that there is no “one size fits all” answer when it comes to saving for retirement. The amount you need to save will depend on factors like your age, lifestyle, and health.
1Fidelity Investments. (2018). Retirees Health Care Costs Estimate Increased Slightly for 2018. Retrieved from https://www.fidelity.com/about-fidelity/employer-services/retiree-health-care-costs-estimate
Spend virtually nothing
The old retirement plan was to sock away enough money to fund 70% or so of your pre-retirement lifestyle. The new retirement plan is to figure out how to get by on a whole lot less.
For many retiring Baby Boomers, the new plan is a reality check. After years of living large – or at least larger than their parents did – they’re finding that their nest eggs, decimated by the Great Recession, won’t give them the kind of retirement lifestyle they envisioned.
What’s more, many are seeing their children and grandchildren struggling financially and don’t want to burden them by becoming “financial leeches.” So they’re rethinking what it means to retire and looking for ways to make their money last longer.
That may mean working part-time in retirement or starting a “side hustle” to supplement their income. It may mean downsizing to a smaller home or living in a less expensive city or state. And it almost certainly means spending less – a lot less – on travel, food and entertainment.
Why the new retirement plan is better
The new retirement plan is a better way to save for retirement. The new retirement plan has yousave almost everything and spend virtually nothing. The new retirement plan is the best way to save forretirement.
How to make the new retirement plan work for you
If you’re one of the many people who are worried about their retirement prospects, you may be interested in the “new retirement plan” that is gaining popularity. The basic idea of this plan is to save as much money as possible and then spend virtually nothing in retirement. While this may sound like a drastic measure, it can actually be quite feasible if you’re willing to make some changes to your lifestyle.
One of the biggest benefits of the new retirement plan is that it can help you save a considerable amount of money. If you’re able to live on a very tight budget and invest most of your savings, you could potentially have a very large nest egg by the time you retire. Another advantage is that this type of plan can help you avoid many of the pitfalls that often plague retirees, such as inflation and poor investment choices.
Of course, one of the biggest challenges of the new retirement plan is making it work for your individual circumstances. If you have significant debts or other financial obligations, it may not be possible to save enough money to make this plan viable. Additionally, it’s important to consider your lifestyle and whether or not you’re willing to make changes in order to make the new retirement plan work for you. If you’re not comfortable with living on a tight budget, this may not be the right solution for you.
Overall, the new retirement plan can be a great way to ensure that you have enough money saved for your later years. However, it’s important to carefully consider all aspects of this type of plan before making any decisions. If done correctly, the new retirement plan can help you build a solid foundation for your future.
This is the crux of the new retirement plan: save almost everything and spend virtually nothing.
This may sound extreme, but it doesn’t have to be. You can still have a comfortable retirement by following this plan. All you need to do is make some small changes to your lifestyle and spending habits.
If you’re willing to make some sacrifices now, you can enjoy a worry-free retirement later. So what are you waiting for? Start saving today!