How to Make the Most of your Money in Retirement

By: Bob Bencivenga

Retiring the Way You Want, With the Money You Have

People nearing retirement age like to talk about the cost of living. In your later years, you don't want to have to work, but you want to be able to live a comfortable life-style, similar to the one you led prior to retirement. Retirement is never as cheap as people think. As Social Security benefits grow less and less secure, and as Medicaid covers less and less, a savvy retiree must make the most of their money to ensure they can live as well as possible. You've worked hard all your life and you should be able to enjoy your retirement as much as possible. With a little planning you can set yourself up to do so.

The largest chunk of any person's cost of living is their primary residence. Real estate costs eat up more than any other category, especially when you factor in real estate taxes, school taxes, and maintenance. Some older people opt to rent a home, while putting their down payment money into a growth account to supplement their income. Others opt to move to the states with the least amount of real estate taxes possible, or with homestead exemptions, which includes South Carolina. State and local taxes are relatively low in the Carolinas. Living outside the boundaries of incorporated cities and towns can help lower your tax bills substantially. Also, pay attention to the school taxes you'll be responsible for, and insurance rates for the area you choose. Living near the coast or in a flood plain doesn't make much sense when it's time to pay the insurance premiums.

Second on the hit list is transportation. Choosing a reliable, safe, and inexpensive car becomes easier every year. There are plenty of options to choose from, Honda and Toyota being prime examples of cars which are easy on the pocket, and have great repair records and resale values. Cars last a lot longer and need less maintenance in the Carolinas, however you'll have the extra costs of insurance, gas, and repairs. If you're of the mindset, you may consider doing without a car, and living in a city or in an area with good public transportation. If you were to live in a city, you'll need to compare the increased cost of housing and public transportation with those of owning a car.

I didn't want to be the one to tell you this, but.... as you get older, you have higher healthcare costs. It's just the way it is. Thankfully, you have a choice in where to live, and thusly can bring down your healthcare costs. Geographical areas are not created equal when healthcare is concerned. Depending on the area you pick, it can save or cost you thousands a year for healthcare. The Carolinas have excellent health care facilities. North Carolina is home to four medical universities: UNC Hospitals are located at Chapel Hill, Duke University in Durham, Wake Forest University in Winston-Salem, and East Carolina University in Greenville. South Carolina has a medical college in Charleston, and major hospitals in Columbia and Greenville/Spartanburg. Visit, www.meps.ahrq.gov, for some great resources and charts to find the cheaper states for healthcare.

Another highly variable factor eating into your retirement fund is income tax. Some states have no state income tax, but they may have high costs of living which offset the gains. In both North Carolina and South Carolina, Social Security benefits are exempt from taxes. Take a careful look at all the factors before deciding on one place over another. Visit www.dornc.com for North Carolina tax information, and www.sctax.org for South Carolina tax information. Read my article, 'Taxes in the Carolinas' at www.PlacesofValue.com.

There are plenty of other areas you control affecting your bottom line in retirement. Food expenditures are a large expense. Do you shop at the high-end store and buy only organic produce, or have you found a great little farm stand where you save a lot? Do you wait for sales and stock up, or do you head to a restaurant every time your stomach growls? You may have developed expensive tastes while you were working, but if you expect your money to last into a long retirement, you may want to re-evaluate how good that $29 filet really tastes. Selectively choosing your recreation can also save you a lot of money. Many towns in the Carolinas have free street festivals during the year. Asheville is home to the Bele Chere festival, Beaufort, SC is home to the water festival, and Lexington, NC is home to a great barbeque festival. The Carolinas have many free parks and recreational areas with plenty of hiking and biking for you to enjoy. You can still have fun, without breaking the bank. Maybe instead of going to the exclusive country club you hit the public links instead. Maybe instead of going to a prime time movie, you catch the matinee. And honestly, do you really need 397 channels?

The bottom line here is you're in more control than you think. Do some research, find a place that makes sense for you, and a way to live there that won't break the bank.

Visit www.PlacesOfValue.com for more articles on best places in North Carolina and South Carolina, relocation made easy, top retirement communities, cost of living, and designing and building your Dream Home.

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