Why $1 Million Is More Than Enough Money for Retirement

Do you feel pressure to save $1 million or more for retirement? Do you break out in a cold sweat when you look at your retirement savings account and see you’re far from your goal? Well, don’t feel so bad. There are plenty of other people out there who don’t retire with $1 million, and they’ve made it work. In fact, workers only manage to save a median of $69,000, according to Transamerica Center for Retirement Studies.

The good news is with careful planning you can make living on less work for you, too. Here’s why $1 million is more than enough for retirement.

Some retirees are able to survive on just Social Security

Happy couple embracing on the beach

With budgeting, it is possible. | iStock.com/Ridofranz

Although there’s no guarantee Social Security will be available to you once you finally retire, some retirees are able to live on just their benefits. Believe it or not, roughly 21% of married seniors and 43% of single seniors rely on Social Security for 90% or more of their income, according to the Social Security Administration. One retiree, 65-year-old Barbara Woodruff, told Grandparents.com that she has been able to live on just Social Security since her retirement at the age of 62.

Next: There may be more help out there than you realize.

Housing assistance is available for qualifying seniors

couple standing outside a large suburban house

Look into assistance programs. | iStock.com/monkeybusinessimages

If you don’t have much saved and housing costs have become burdensome during retirement, you might be able to get help from the government. Provided you meet income and age requirements, there are some assistance programs that could freeze your housing expenses. New York, for example, has the Senior Citizen Rent Increase Exemption program. In addition, the U.S. Department of Housing and Urban Development has several housing programs for seniors.

Next: This is your ace if you’re trying to reduce costs.

You can move to a location with a lower cost of living

Senior couple mountain biking

Relocating could save you so much money. | iStock.com/monkeybusinessimages

Who says you have to continue living in your current state? Chances are moving to another location could save you some big bucks and allow you to live on less. If you’re willing to relocate, there are plenty of places you can live that have a much lower cost of living and offer an excellent quality of life. Some of the best places to retire, according to the Milken Institute, are Toledo, Ohio; Jackson, Mississippi; and Madison, Wisconsin.

Next: It’s amazing how much more room you have when you pay this off.

You can live on less if you pay off high-interest debt now

Senior man and woman couple embracing at sunset

Start paying off debt a little at a time, so you don’t have to worry. | iStock.com/dmbaker

You can also make a living on less work if you make an attempt to pay down debt now. Carrying a mortgage into retirement or holding on to credit card debt will make it much harder to be comfortable during your golden years. It’s in your best interest to start paying a few extra dollars each billing period, so you can attack high debts now. This way, you’ll have more disposable income once you retire. And who doesn’t want some extra cash in their wallet?

Next: Not everything gets more expensive.

Some of your costs will be lower

senior relaxing in hammock

There’s no more need for expensive suits. | iStock.com/monkeybusinessimages

Fortunately, you won’t have the same expenses when you retire. Costs for services, such as health care, will likely rise, but other expenses will generally cost less during retirement. Your cost for clothing, for example, won’t be as much because you won’t have to work in an office every day. The reduction in living expenses will make it just a little bit easier to meet some of your daily needs.

Next: Alternative living arrangements might be your answer.

You can take advantage of alternative living arrangements

woman helping senior woman

Look into all your housing options. | iStock.com/Highwaystarz-Photography

Living alone isn’t your only option. The co-living trend has been popular among millennials, but living with a group of people in a dormitory-style arrangement has no age restrictions. Young and old alike can take advantage of the benefits of co-living. If you don’t have friends or family you can live with, this is another option to help keep costs at a minimum during your retirement years. Some seniors are even taking it upon themselves to move in together and share costs.

Next: Some things are free for seniors.

Seniors can get tons of free goods and services

Senior woman at grocery store

Ask about the senior discount. | iStock.com/gpointstudio

You’ll be happy to know some things in life are still free. Senior citizens are often able to get many discounted or free goods and services. You can save money on anything, from food and beverages to prescription drugs and eye care. If you know where to get these deals and steals, you can save a ton of money and be able to live a decent retirement lifestyle on less than $1 million. It might take a bit of time and creativity, but it is possible.

Next: Raising children are expensive and hopefully you’re done with that part of life.

Child care expenses are usually no longer a money drain

senior couple in park

Caring for children is expensive. | iStock.com/monkeybusinessimages

If you’re a parent, at this point in your life your children are likely out of the house, taking care of their own families. Fortunately, that means less cash is going toward raising kids. A middle-income, married couple with two children is estimated to spend $233,610 to raise a child born in 2015, according to the U.S. Department of Agriculture. Now that your children are off living their own lives, you can use that money toward your own expenses.

Follow Sheiresa on Twitter @SheiresaNgo 

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