Being financially savvy is always important, but can become crucially so during retirement when you rely on savings and investments rather than a monthly salary. Ideally, everyone would save and plan for retirement right from when they begin earning, but this often isn’t practical for those with a mortgage and children. Whatever sums you’re dealing with, the best way to maximize your money and minimize your stress is to make a realistic plan.
Making a Plan
Start by pulling together information on your income. What savings do you have? Calculate your pension value and what you expect to get from social security – there are several online tools which can help with this.
Then consider your expenditure: add up your regular monthly outgoings, but consider things which may differ as you get older, such as an increased spend on healthcare. You might have a dream holiday you want to go on, or a special purchase such as a boat or classic car. It’s important to keep this realistic to avoid nasty surprises later.
As Time Goes By
It’s important to reassess your plan regularly. Fluctuations in markets and interest rates will affect what you have to spend and save, and a small percentage difference can make quite a big impact on 20 or 30 years of living expenses. Review your budgets for outgoings: are you sticking to them? Are there areas in which you are saving, or ones where you are overspending? Try and stay abreast of developments and changes in the financial sector, as burying your head in the sand does no good. Banks will often have specialized help and policies for seniors in later life which can be worth taking advantage of.
Dealing With Stress
Financial stress peaks for people during their 40s, but remains significant in later life, with 31% of over 50s reporting financial stress and 19% of over 70s. The best way to combat it is to have a thorough and realistic financial plan, because this reduces surprises and the likelihood of situations which might become stressful. However, it is also important to be prepared for stress regardless.
Learn what the signs of stress are and how to alleviate them: make sure you do not become isolated and lonely in retirement, and take care of your health by eating well and staying active. Research sources of help so that you have someone – whether professional or family – to talk to if you enter difficulties, and try to always tackle the situation head on.
Article Written by: Jenny Holt, Wednesday, January 11, 2017 8:58 PM