After a long life of working hard, you’ve finally hit retirement age. This is a fantastic time to reflect on all the wonderful things you’ve done throughout your occupational journey, and start to focus on enjoying some recreation in your twilight years.
You’ll either move into living off your savings for the rest of your life, receiving a lump-sum payment or payment plan from your retirement accounts, or receiving a government pension depending on what you are eligible for. To make the most of your money, a bit of planning is in order so you can make sure your retirement is a comfortable one.
Work out what it is you want from your retirement
You’ve suddenly got a lot of free time on your hands, and many seniors use this opportunity to take up hobbies they’ve always wanted to try or to participate in more activities. Deciding what you’d like to do recreation wise and researching the ongoing costs of taking up the activity is the first step towards a comfortable retirement.
Perhaps you’ve always wanted to build model trains. If this is the case, you’ll need to factor in the cost of the materials, the new parts and the ongoing supplies like glue. Deciding how much you’ll want to put towards this hobby each week will help you stay on track and discourage overspending. To help you establish a retirement budget, a retirement calculator is a helpful tool in finding out how much money you’ll be entitled to each week whilst managing your savings effectively.
Maybe instead you’d like to save for a bigger goal, such as an overseas trip. Working out the cost of the vacation, including accommodation, meals, tips, and entertainment will give you a figure to start saving towards. You’ll be able to factor in savings each week or month towards your vacation whilst maintaining your budget and still living within your means.
Preparing for the unexpected in your retirement years
Life is full of twists and turns, so it’s only smart to prepare for the unexpected. Writing out a budget, creating a legal will, creating a rainy day fund and making sure your insurance policies are up to date are all great ways to make sure that when an unexpected expense comes up, you won’t be drowning in debt.
Making sure your insurance payments are on time and up to date is like having a savings fund that is managed for you. If you’re the sort of person who dips into their savings quite a bit, insurance funds will guarantee the repayments you make can’t be touched until you need them most.
It’s easy to forget that unfortunate events can (and will) happen, particularly when your life is running along comfortably. A death in the family or sudden health issues can cost thousands of dollars in payments, particularly if you don’t have private health or life insurance.
When these costs pop up and you don’t have a contingency plan in place, you could be facing bankruptcy or even homelessness in extreme cases. Preparing for the future now guarantees these worst-case scenarios won’t happen, and it’s always better to be safe than sorry.
Making sure your savings are on track during retirement
Not all superannuation, IRA, 401Ks or retirement funds are created equally, and it’s a good idea to do some research on the fund you’re currently with, or make arrangements to pay into an account that more aligns with your goals.
Many people don’t realize that throughout their careers, they may have had several different 401K and IRAs that your employers will have been paying into. Consolidating these into a single account ensures you know the exact figures you’re working with for your retirement.
You may be wondering if it’s better to save into a personal bank account over a retirement account, and there are both pros and cons to each of these options. When saving into a personal bank account, it can be easy to dip into your savings whenever you like, leading to overspending.
Some retirement accounts charge a monthly or yearly fee you may not have been aware of, and your retirement money could be depleted quicker than you’d like. Finding a retirement option that fits your needs is, therefore, a very important part of making your future comfortable. Don’t be afraid to ring around and find something that suits your goals.
Learning how to keep yourself financially stable during retirement
In preparing for a comfortable retirement, it might mean working harder now so you can enjoy the benefits later. Paying into a life insurance policy, having a rainy day fund and sticking to your retirement budget are the best ways of making sure your future is financially covered, even when the unexpected happens.
Preparation is key, and your senior years should be spent enjoying the fruits of your labor. With a little planning and organizing, such as using a retirement calculator or consolidating your retirement accounts into one fund, you’ll be set up for retirement success.