How To Live Off Of Your Retirement Savings Forever

4 min read

live off of retirement

Retirement and financial freedom aren’t only about how to get there or amassing as much wealth as you can, but it’s also about how you can maintain your retirement and live comfortably for the rest of your life! So an important question to ask is how to live off your retirement savings comfortably.

There are a lot of things to consider when retiring. Your current hobbies, your financial situation, how much you have saved for retirement, and even your health, can play a part in how you can manage your retirement.

Whether you have $100,000, $250,000, or even $1 million dollars in your retirement, it shouldn’t lead you to live a carefree life. Without careful consideration and planning, you can quickly outlive your nest egg. There needs to be a good strategy of how you can spend that money wisely and have it take care of you.

On the other hand, you don’t want to be fearful on how you spend your retirement. You spent your entire life building up the nest egg, so with careful and considerate spending, you can also get to enjoy it during your later years.

So here’s how you can live off of your retirement savings

1. Have a spending budget

The first thing might be an obvious one, but an important one to always remember. Everybody hates budgeting, but when trying to live off of your retirement savings, everyone needs to make sure that they have one.

Having a tight spending budget will ensure that you don’t overspend, and at the same time, underspend your retirement. There is always room to enjoy your retirement, but this can also be done responsibly and sustainably.

Not having a spending budget can easily lead you to overspending and running out of your retirement. It’s easy to sit back and relax, spend loads of money, thinking that it won’t run out. So many people are mistaken by that, so make sure you don’t fall into that trap.

A good rule of thumb to remember is that 4% should be your spending limit on the retirement savings that you have. So if you have $1 million in your retirement, you can spend up to $40,000 a year on that retirement.

2. Maximize social security benefits

The thing with Social Security is that the earlier you get it, the less you actually receive! This is a rule put in place by social security itself. So make sure you avoid starting social security too early.


Social Security is not a retirement plan! It was meant to only supplement your own retirement, so don’t rely on it to retire! Definitely not going to be enough

3. Minimize your expenses

Similarly to how you should budget your money when in retirement, you should also try to make your money last longer by minimizing your expenses. These things can be your home, food, transportation, and things like credit card payments.

A really good thing to do in your retirement is to cut back on your housing. That’s typically the most expensive thing you can have when retiring. That’s why things like “downsizing” are important things to consider. This will reduce your mortgage costs (if you have one), utility bills, taxes, etc.

So go ahead and check to see where you can cut back a little on your expenses, and have your money last longer during retirement.

4. Work a little longer

Nobody likes hearing this unless you’re naturally a workaholic! By working just a few years longer, this can greatly increase your standards of living during retirement.

Your retirement has a couple more years to grow, you can increase your social security benefits depending on your income, and the more years you continue working. When these things grow, it means that much less you have to work for the money during retirement.

Another option would be to transition to something much less intensive and require very little “actual work”. This could be very appealing to some, and that little income could make all the difference.

5. Buy off your home

If you enter retirement and have an outstanding mortgage, you should consider completely buying off your home with a portion of your retirement.

Like I mentioned earlier, your home is typically your greatest expense during retirement. Buying it outright, and not having a mortgage payment, is not only an incredibly liberating feeling, but it’s lifting a huge montly burden on your monthly expenses.

A home can also be considered a safety net as well! If you ever run out of money completely, that home can be sold, and that’s potentially hundreds of thousands of dollars in equity.

Selling your home would be the absolute last resort, but it’s comforting knowing that when you’re wanting to live off of your retirement savings, you have an asset that can be turned around and be a last-resort source of funds.

6. Invest some of your retirement

It’s never too late to invest! Depending on the size of your nest egg, you might also consider investing some of your retirement into a safe investment. Things like government bonds are considered very safe and can help maintain your retirement.

For instance, if you have $3 million in retirement, and invested $1 million to government bonds, earning 3%, that’s $30,000 a year on your $1 million dollar investment. This can definitely make your retirement go a little further.

7. Maximize credit card points

I personally am a firm believer that if you use credit cards responsibly, the free money awarded to you is too hard to pass up! This strategy only works if you’re responsible, and use credit cards wisely.

There are cards that offer up to 3% cash back on all purchases that you make, and some that are dependent on certain categories. Depending on your credit card of choice, you spend money like you would have anyway (like utilities, groceries, gas, etc). This money in turn earns you points and cash back, and you can use those rewards however you like!


Always pay back your credit card balance in full, every single month! The interest you pay for your purchases wipes away your points and earnings, making it useless! Don’t forget that!

8. Plan for long term care

The unfortunate thing is that we are all human beings. Humans tend to grow sick and weak the older we get. Long term care is an unfortunate reality for most people when they retire. It’s also a very expensive thing to face.

Long term care can run up to $100,000 a year, depending on the city. Some places are more, and some are less. It’s important to have long term care insurance, even if you don’t need it. Imagine paying that much for the care, your retirement savings can get wiped out in no time.

9. Live a little healthier

Being sick can be very expensive. Many health issues that people face can be entirely preventable, and all it takes is to live a little bit healthier lifestyles. Issues like high blood pressure, arthritis, cholesterol, are things that you can work on and reduce the likelihood of them happening to you.

The fewer times you visit the doctor, get admitted, or buy medication, the longer your retirement will last. Instead, spend more on healthy lifestyle choices like better food, and a gym membership. thus increasing your quality of life. It’s also much cheaper!

10. Always re-evaluate, often

You know what’s the worst? Getting hit by a train, and not see it coming! Being retired means that you’re done with the rat race, and are now ready to take a long mental break. But, it’s also not a reason for anyone to evaluate themselves once, and forget about it.

Always make it a point to periodically take a look at your income (if you have passive investments), your net worth, your inheritance plan, your assets, etc.

By doing so, on a regular basis, will ensure that you have a level of confidence that prevents you from falling off a cliff and destroying your retirement. So always make sure you’re on top of things!

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