Bankrate follows a strict editorial policy, so you can trust that we’re putting your interests first. Our award-winning editors and reporters create honest and accurate content to help you make the right financial decisions.
Key Principles
We value your trust. Our mission is to provide readers with accurate and unbiased information, and we have editorial standards in place to ensure that happens. Our editors and reporters thoroughly fact-check editorial content to ensure the information you’re reading is accurate. We maintain a firewall between our advertisers and our editorial team. Our editorial team does not receive direct compensation from our advertisers.
Editorial Independence
Bankrate’s editorial team writes on behalf of YOU – the reader. Our goal is to give you the best advice to help you make smart personal finance decisions. We follow strict guidelines to ensure that our editorial content is not influenced by advertisers. Our editorial team receives no direct compensation from advertisers, and our content is thoroughly fact-checked to ensure accuracy. So, whether you’re reading an article or a review, you can trust that you’re getting credible and dependable information.
You have money questions. Bankrate has answers. Our experts have been helping you master your money for over four decades. We continually strive to provide consumers with the expert advice and tools needed to succeed throughout life’s financial journey.
Bankrate follows a strict editorial policy, so you can trust that our content is honest and accurate. Our award-winning editors and reporters create honest and accurate content to help you make the right financial decisions. The content created by our editorial staff is objective, factual, and not influenced by our advertisers.
We’re transparent about how we are able to bring quality content, competitive rates, and useful tools to you by explaining how we make money.
Bankrate.com is an independent, advertising-supported publisher and comparison service. We are compensated in exchange for placement of sponsored products and, services, or by you clicking on certain links posted on our site. Therefore, this compensation may impact how, where and in what order products appear within listing categories. Other factors, such as our own proprietary website rules and whether a product is offered in your area or at your self-selected credit score range can also impact how and where products appear on this site. While we strive to provide a wide range offers, Bankrate does not include information about every financial or credit product or service.
Grandma was right. Living on just a little bit less can go a long way toward ensuring your retirement income will be sufficient to carry you through the years when you’ll need it.
This retirement planning finding by actuary Anna Rappaport, chair of the Committee on Post-Retirement Needs and Risk for the Society of Actuaries, and key author of a new study on retirement security, confirms what many of us would have guessed. But it comes with some important caveats.
Living frugally won’t help you much if during your working life you earned an average income and your retirement budget is tight to begin with. Rappaport’s study calculates that couples who made an average income of $60,000 during their working lives and who are retiring with less than $100,000 in savings may be able to survive everyday problems by living frugally, but eliminating this kind of discretionary spending won’t be enough to help them overcome major shocks such as serious illness or even just simple longevity.
But if you earned more during your working life and you have a more generous retirement budget, cutting just 15 percent of discretionary spending can increase the likelihood that you will have enough money throughout your lifespan.
For instance, the study found that cutting just 15 percent of spending increases the probability of having some money left at death from 8 percent to 54 percent for couples earning $105,000 annually during their working lives and retiring with $250,000 in savings. Similar frugality can extend the probability of having some money left at death from 14 percent to 32 percent for couples earning more than $150,000 annually and having $500,000 in retirement savings.
To have these kinds of results, you have to first have a budget that reflects what you’re spending and the self-discipline to consistently live on less. But the reward for old-fashioned thrift can clearly be a big one, especially if you simply haven’t saved enough.
Share