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Making the Most of a Disappointing Retirement Nest Egg

Scott Holsopple

Someone close to me recently learned she'll need to live on far less money than she ever imagined during retirement. Alas, she's reached retirement age, and she's ready. This lady isn't going to prolong her full-time working life another day.

I wish, I wish, I wish.

I wish she'd saved more money when she was working. I wished she'd started investing when she started her career, or very soon thereafter, so she could take advantage of the benefits of compounding. I wish she'd created a diversified, personalized investing plan and ignored the advice of amateur investors.

Young investors, you can learn from her mistakes.

Retirees and almost-retirees who find yourselves in the same boat as my loved one, I'm going to share some of the advice I shared with her.

Stay invested. Actually, this is good advice for all retirees. Though your investing allocation will change when you retire, resist the urge to cash everything out. Let your money keep working for you. A retirement adviser can help you develop a long-term investing plan for your retirement years.

Get a part-time job. There are benefits beyond the extra money:

--You'll have something to occupy your time.

--You won't be spending money during your working hours.

--You may be able to get discounts through your part-time employer just like you did during your full-time working days.

--In many cases, a part-time job will allow you to interact with other people and make friends, which can be difficult during retirement.

Of course, the extra income will also be helpful.

Become a budgeter. If you're trying to live within limited means, especially if you're used to spending more, a budget will really help. Create a list of all your expenses, and figure out the amount you'll spend per month on each item.

Turn frugality into a hobby. You don't have to be a professional coupon clipper, but you can approach frugality as a game you're trying to win. Search the Internet for the best deals before you make purchases. And remember the cardinal rule of bargain shopping: It's only a good deal if you need it.

Develop some hobbies that are frugal. Try gardening, landscaping, writing, drawing, or knitting. You may even be able to sell your services or the things you make.

Get into cooking. You have to eat anyway, right? And when you're cooking, you aren't eating at restaurants, which is expensive. As a bonus, cooking will allow you to eat a healthier diet than people who dine out more often, and that could reduce your healthcare costs.

Skip the travel and explore your city or town. Many areas have deeply discounted rates on tourist attractions for locals, so explore areas around you that you might have missed while you were working.

When I told my loved one I planned to write this post based on our conversations, she recommended I offer one piece of advice from her: Change your expectations so you're able to enjoy retirement rather than wishing or hoping for more luxury. Allow yourself to be happy with less if less is what you have.

Scott Holsopple is the president and CEO of Smart401k, offering easy-to-use, cost-effective 401(k) advice and solutions for the everyday investor. His advice has been featured on various news outlets, including FOX Business, USA Today and The Wall Street Journal.

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