Financial Management in Retirement

Retirement can be a welcome reward for years of working hard, and you want to make sure you manage it well in order to truly enjoy it.  When you retire, your source of income no longer comes from wages and earnings, but from social security and retirement funds.  These sources, along with any savings accounts, are limited and will need to be carefully managed to maintain a quality standard of living. 

Assess Your Current Financial Obligations

Are you renting or do you own your home?  There are pros and cons in each scenario and it is important to know how they are currently (or will in the future) affecting your finances.  Renting can be advantageous in that you would not have to be financially responsible for structural problems, appliances, plumbing or electrical issues, or homeowners associations. 

If you already own your home, the positives include having equity you can work with if you need help financially later or having something that can be passed on to family to help them in the future. Take note of how your rent or mortgage will affect finances in retirement.

Make sure to comb through all insurance policies.  Get to know all the up front and hidden costs and benefits of your health insurance, life insurance, property insurance, etc.  For instance, a life insurance policy will provide additional income if your spouse outlives you.  Some also offer comprehensive long-term care insurance riders and other benefits that could streamline or eliminate the need for multiple insurance policies.

Check into your tax situation.  Think about property, deeds, and withholdings and investigate the tax obligations that come with them.  Look into your social security and retirement benefits to find out how much you are actually receiving after taxes.  These amounts after taxes are what you will have to use to budget with. 

Create a Budget

Budgeting becomes imperative during retirement since you will likely not have as much money coming in as when you were earning an income.  The most important components of a budget include noting all sources of income, gathering all expenses for the year, breaking it down into monthly amounts, and tracking/updating your budget each week.

Determine a savings goal to incorporate into your budget that works with and for your lifestyle to plan for unexpected expenses or vacations.  You want to have a cushion, but do not necessarily have to deprive yourself or your quality of life to make it happen. 

Determine if you will have a certain amount of money left over for investments.  Wise investing can be a great bonus during retirement.  Avoid using family members for investment advice and consult a trained financial advisor to create short and long-term investment plans.  Take into account inflation, swings in the financial market, and avoid investments you do not understand. 

Start by researching simpler investment products like bank CD’s, annuities, index mutual funds, and dividend-paying stocks from established and financially stable companies.  Some of these are better during economically uncertain times.  You can research more on or with your financial advisor.

Some great tools exist online to completely manage your budget.  Mint is an all-in-one free software package that enables you to manage money and pay bills in one platform.  It can track bill payments, spending patterns, investments, and send you alerts. You can also try You Need a Budget (YNAB), Personal Capital, Quicken, or Mvelopes.  Decide what might work best for you and it can make budgeting so much easier, while keeping everything you need for an overview of your retirement finances at your fingertips.  These will also make it simpler for you to update or change your budget whenever your financial situation changes, or if you need a family member to manage it while you are away.

With a detailed budget plan, knowledge of all expenses, intelligent investing, and savings for the unexpected, your retirement can be smooth sailing!

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Alternatives for Seniors is a print and online directory that specifically caters to the housing and personal care concerns of senior citizens and their families. Call our Senior Specialists at (888) WE-ASSIST (888-932-7747) or visit the Alternatives for Seniors website to begin searching for the perfect home for you or your loved ones.

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Thank You to Our Guest Blog Writer:

Jackie Waters


BLOG Date: Friday, April 14, 2017

Photo via Pixabay by Coombesy