You may have thought to yourself, why do I need to keep saving if I’m retired? Aren’t I free to spend all my money at this time of my life now? The reality is, just because you are retired does not mean you need to stop saving. There are many reasons to continue saving after retirement. People save for different reasons, but in general, it is so that you know you will have funds there when you need it. Here are seven reasons why you should keep saving after you retire.
#1 Keep your emergency fund growing
As you may know, unexpected expenses happen in life. That’s why it is essential to have an emergency fund. You may have an unexpected car repair bill, medical bill, or an expensive home repair. If you are still saving in retirement, you do not have to worry about dipping too much into the money you have and it not being replaced. You would be able to pay for those unexpected costs with more peace of mind. You never know what may happen in life, so keep that emergency fund growing.
#2 Save for a big purchase
When you retire, you may want to go on a once-in-a-lifetime vacation. With all your free time, you may want to take that trip to Greece you’ve meant to take. Or you may want a new car that is easier and safer for you to drive. Whatever big purchase you’re looking to make, saving after you retire will help you purchase these things. Having a big goal like going on vacation or buying a new car will motivate you to keep saving.
#3 Prepare for sinking costs
Sinking costs include taxes, home improvements, holiday and birthday gifts, and any other irregular costs. This is money that is set aside for the future. You can estimate what a home improvement project or taxes will cost and have that money prepared for them. Your savings will not go bye-bye after you’ve paid for such sinking costs if you keep saving in retirement.
#4 Saving is fun
With so much time on your hands, odds are you will want to pick up a new hobby. You can turn that hobby into learning how to save efficiently and make yourself more money. You can open different savings accounts or challenge yourself to save a little more each week and turn it into a game. Saving provides extra money, so go for it.
#5 Life expectancy is increasing
Life expectancy has had a steady increase in the last couple of years. This is attributed to cleaner living conditions, improved healthcare, and improved social awareness around health. Today, the average life expectancy is 80 years old. In 1960, the average life expectancy was 71 years old. People are typically living longer these days. This means you should keep saving after you retire in case you outlive your retirement savings.
Being retired with grandkids means you will probably want to take them out here and there. Grandkids are a great reason to keep saving after you retire. Whether it be a vacation, a movie night, or a day at the trampoline park, those fun times with them cost money. Saving after retirement guarantees that you’ll have sufficient funds to take them out and enjoy their company.
#7 Taxes – One thing that’s certain in life
Benjamin Franklin once said that death and taxes are the two certainties in life. Once you’ve hit retirement, you are aware of taxes and how they work. You’ve dealt with them most of your life and know just how much of your money they take. When you’re retired, you won’t have to worry about payroll taxes, but you will have to think about taxes on your Social Security. To avoid feeling anxious during tax season, make sure you save for tax season throughout the year. Keep those savings growing even after retirement to ensure you can pay your taxes as they come.
Saving after retirement keeps you prepared for no matter what life throws your way. Saving after retirement keeps your emergency fund growing, helps you save for a big purchase, prepare for sinking costs, and outliving your savings, to name a few reasons. Retirement is a time to enjoy your life and everything you have worked for throughout the years. Make the most out of your retirement by saving even after you’ve retired. You will never regret saving money.