Finally! After years of hard work and dedication, you can retire and spend your time enjoying the things you love. You can pursue that long-awaited international trip or take up a forgotten hobby. But, in order to pursue these activities and live out your retirement years, you will need money. Although you spent a significant portion of your life saving and planning for retirement, the process should continue even after retirement in order to maximize the chances of continued financial security and freedom.
Experienced investment advisor Mark Matson provides post-retirement financial tips to help your savings last well into the golden years.
1. Know Your Withdrawal Rate
Assuming you started your retirement savings at an early age and consistently contributed to it, you potentially have a large nest egg. But the question is how much you can reasonably withdrawal from it each year without using every last penny before the end of your lifetime? Generally, the early years of retirement are when individuals are the most active and spend the most. If you spend too much, though, you may wind up reducing your income for later years. Know how much you can spend comfortably each year.
2. Create a List of Things You Want to Do
After decades in the workforce, once you retire you have complete control over how your time is spent. Many look forward to retirement because they can do things they’ve always wanted to. You can travel, go on a cruise, go back to school, or start a business. But, all of this will cost money. To help ensure you can enjoy your retirement and stay within budget, create a list of all the things you want to do and how much they will cost. Approach these luxuries as a financial objective and confirm that you have the money to pay for them.
3. Cut Spending Where You Can
Many individuals spend more money on leisure activities during retirement. Now, if you factor in necessary expenses, such as your mortgage or rent, food, and utilities, your monthly spending instantly increases. Review your income and spending, and identify areas where you’re spending more than you expected, or are spending on unnecessary items.
4. Work During Your Retirement
Today there is a growing number of retirees who choose to work after they retire. In contrast to spending each day doing anything they’d like to, they choose to work after retirement as an additional source of income, to make social connections, and avoid isolation. If you find a job you enjoy and work during your retirement years, the financial aspects of your retirement planning will be much easier.