web stats

Plan Up to be Financially Strong after Retirement


Is your retirement approaching soon? You must be worried about your financial security, then. However, you will have plenty of time in your hands to do whatever you want. You can go for a holiday in your dream place or spend your spare time doing some interesting activities which can keep you involved.

For all these, you will be in a need of a good amount of money in hands, which after retirement becomes difficult to manage. Yes, once you get retired, you will be left with no job or salary. So, how will you manage all these expenses?

old folks retirement

What you need is proper planning to cope up with all the post-retirement expenses in a better way.

Go for savings

You must start saving before you get retired. When you are working you should adopt this habit, it will help you accumulate a good amount of money for your retired life.

  • You should stop wasting money behind maintaining a luxurious life. Know the difference between necessity and luxury. Spend only for your necessities. It will help you save a lot.
  • You must plan up your budget in a systematic way. You should spend a lesser amount than what you actually earn. It will help you save a good amount.
  • You can apply for having a retirement plan. It will help you save in an error freeway.

When it comes to saving a good amount of money for your post-retirement life, nothing can be better than an annuity.

Yes, contact your financier now and ask him about the annuity schemes available. Since different schemes offer different facilities, you must know about these retirement plans before you apply to any of these. According to your requirements, you must choose the plan that suits you the best.

What is an annuity all about?

When your retirement is about to come, you must prepare well. Annuity helps you to be prepared at best.

  • You save money for your retired life.
  • When you are working it helps you save money for life, when you won’t be working.
  • After your retirement also, your income doesn’t stop.
  • You continue to get a fixed income until you die.
  • In fact, your family gets death benefits.
  • You get to live a secure life.

There are 2 main types of annuity schemes available,

Fixed annuity

It offers the annuitants a fixed rate of interest for securing their post-retirement life. In fact, no matter whether there is inflation or recession, annuitants get a good income.

Variable annuity

It helps retirees enjoy a good return because, with the growing market, the annuitant continues to get greater returns.

Now, when you are all set to apply for the annuity schemes to make sure that you save better for securing your post-retirement life; you must use an annuity calculator. It will help you know what you can get in return.

Since your post-retirement expenses are great issues; you must plan up for it now because the better you plan the better you live.

Do You Have Concerns Over Your Retirement Income?

For many of us, retirement saving is overshadowed by more pressing day to day needs and so we often place it in the back of our minds and think we will consider it later. Saving for your retirement can seem too far away, however, pensions are deliberately designed as long-term savings to secure your future and there is, therefore, no better time to start than the present.

Spending a little bit of time pension planning can make a huge difference to your future and security. For many people, using a pension calculator is the first step towards understanding what they already have invested and how much they will need to save over time.

The Clearer Picture

A pension calculator can help estimate retirement income and therefore provide a clearer picture of what to expect in retirement. Adjusting minor changes in the pension calculator fields, such as how much you expect to save each month or how long you expect to work, can demonstrate the vast difference that small contributions can make.

Using a pension calculator can also be a wake-up call for some savers who have been lax in their retirement savings. This is because seeing your potential retirement-income in black and white can have a motivating effect and depict what seems to be a faraway concept into consideration which is actually looming quite quickly.

Remembering That Calculators Are Just The First Step

It is important to remember that pension calculators can only provide you with an estimate of how much your pension will support you in retirement.

This is meant to be a guide for savers who may learn that they are putting $100 away each month when they really need to be saving closer to $200 per month in order to reach their ideal retirement income.

Since these types of calculators can only be used as a guide, your eventual retirement income could be less or potentially more than what you initially predicted.

It is always important to also consider other tools, such as investment performance indicators and counsel from an independent financial advisor in conjunction with your own research to place you in the best position for your future.

Get a Head Start

It is important to begin considering your pension as early as possible. Pension savers should be sure to take inflation into account, as well as unforeseen expenses such as home or car repairs.

Once armed with this information, a pension calculator can help you better understand whether you are doing enough for a comfortable retirement, or whether you need to adjust your contributions while you still have time.

Savings When Retired: How to make it Happen?

Retirement means no more going to the office early in the morning and returning home late all stressed out and tired. It means you finally have a chance to enjoy your life, to sit back and relax. But no work means no steady income.

That is why retirement plans are so important and financial experts are always giving them so much importance. What becomes more important after retirement is to have a good savings plan.

retire saving

Savings become more challenging after retirement because of the fact that you no longer have a steady income. Let’s look at the ways in which you can save money after retirement.

You have most probably moved to a new city after your retirement. There is no need to make a long term commitment like taking a house on mortgage. Rent it instead. That way you will also have time to decide whether this is where you want to stay for good.

Don’t shop impulsively. There is nothing smart in being a shopaholic. After retirement and a lot of free time on their hands, many people feel an urge to go out shopping and spend a lot of money. So control that urge and remind yourself that you no longer have a steady income.

There are a lot of people who continue to work after retirement. Look for a part-time job that you can enjoy doing. The work hours will be short and you will have fun doing the job as well. Plus, you will earn additional income every month to spend on yourself and enjoy it.

There are a lot of products and services that offer good discounts for senior citizens. Associations like the American Association of Retired People offer great discounts to their members on various products. Over time the money you save due to these discounts will add to a sizable sum.

You might want to reconsider the life insurance plan that you have. You might already be part of another plan that offers life insurance like your retirement plan. Then you don’t need to spend extra in paying for a separate life insurance plan.

Don’t become fooled by identity theft and other scams. A lot of the younger people online and otherwise resort to scamming senior citizens because they believe it is very easy. Save yourself and your hard-earned money from these scammers.

Check for the extra services that you are paying for. Cut down your expenses by unsubscribing to unwanted services that you barely use as a premium connection from the cable operator that you never even utilized. Instead, downgrade to a package that is affordable and more suitable for your use.

Weigh Your Retirement Options

When the time comes for you to retire, what is your plan? Is this a question you’ve asked yourself? Chances are it’s something you haven’t considered beyond a destination to visit or time spent with family. Most people don’t give retirement too much thought until one-five years before it happens.

The earlier you begin to plan your retirement, the better your life will be after it happens. Consider where you want to live, trips you would enjoy, and what your finances will be like before it’s too late to change them much.

Destinations

Many people consider travel as a top priority when they retire but then fall into one of two traps. They either think that doing the research now may be a waste since the landscape could change over time or think that picking a country or one location is sufficient planning for now.

For instance, France is roughly the size of Texas, but it is divided up into several unique regions. Paris is a wonderful place to visit, but there is so much more than the country has to offer. Take the time at your leisure to read travel books and talk to a travel agent. Who knows, you may even find some places you’d like to visit before you retire.

Finance

Social security is not what it was for our grandparents’ generation. These days, people need to have multiple sources of income if they are going to retire comfortably. Meet with an investment broker or someone at your bank to discuss options for investing your money.

If your company offers stock options or a 401K, meet with someone in human resources to gather information about electing to put in some of your paychecks every pay period to your future. You are never too young to begin planning for your future.

Residence

The older you become, the more you realize the need to downsize your home and live somewhere comfortable. Priorities shift with age and living among a community of people your age becomes important. Florida has a large population of senior citizens.

Consider rental home as an option if you decide to live down there. If you enjoy it, you may decide to invest in purchasing a property, or you may find renting is less stressful. Discuss several options with your spouse or family as to where you could live upon retiring.

Planning ahead for retirement takes just a few hours here and there to process information and discuss it with your family. The gains, however, are very worthwhile.

Follow the 80% Rule Can Make Your Retirement Money Not Enough

Most retirement planning models say to plan to have an average of 80% of what you’re making while you work available to you when you retiree so as to maintain your current way of living. That may have worked in the past. However, many future retirees will find that following this rule may not give them enough money to live on in retirement.

The 80% rule is based on the idea that retirement won’t cost you as much as working – that your expenses will go down by 25%. Certainly, you won’t need to pay your commuter expenses or maintain as extensive a wardrobe, but there are other things built in that may have nothing to do with you at all.

For example, a financial retirement calculator may assume that you will have paid for your home and that your children will be out of the nest before you retire. Maybe. On the other hand, people marry late, have waited to have children, have children in college, or their college graduates have returned home because they can’t find a job.

This means that expenses might actually increase, rather than decrease. What this means to the future retiree is that they must calculate their own personal expenses into any retirement model.

Don’t Plan on the “Empty Nest Syndrome”

Should you have put off having children until your forties, something is done by many Baby Boomers, you may still have children who haven’t left home yet. And then there are the aforementioned kids who return home after college. You may adore having your children in your home, but it doesn’t make life any less expensive.

You may also have remortgaged your home to finance your kid’s college expenses. This means that paying off your mortgage prior to retiring is not a possibility. And how can you sell your home and move to a smaller house if your house is still full of kids?

If given the option to retire early, you can certainly assume that your expenses will increase unless sitting home and knitting is your idea of a fun retirement. Most people who can retire early look forward to travel or expensive activities like sailing, golf, and more.

With lots of retirement years ahead, it’s important to have enough money put away so that you can live off the interest and never have to dip into the principal. If you retire early, assume that you’re going to need 110% of the salary you’re making now, not 80%.

And never make the assumption that your taxes will go down. In fact, between Social Security, your pension, any income you have from investments, and money from your retirement account, you could actually have to pay more in taxes. And there are always property taxes if you own a home. You’re lucky if you live in a state where homeowners don’t pay property taxes.

Expect Health Costs to Rise

Even if your health is perfect right now, it’s most likely that health care needs and costs will go up as you get older. Even ordinary health care costs have risen sharply recently and that’s unlikely to change.

Continuing to live a healthy lifestyle may keep you healthier longer but it gets and harder as you age. And a sudden illness or the need for long term care can take a big bite out of savings.

Don’t Rely on Statistics

According to statistics compiled by the U.S. Department of Labor’s Consumer Expenditure Survey, retirees spend less money than those in the workforce.

Financial Planner Ty Bernicke says that, according to statistics, that every ten years past the age of 55, spending goes down by 25%. This means that a 75-year-old spends about half of what a person in the 45 to 54-year range spends.

Unfortunately, these statistics don’t bring inflation into the mix or account for any unexpected expenses. This can cost the retiree who depends on these statistics a lot of money. Be sure to take a good look at your own lifestyle and your own expenses to come up with reasonable personal retirement expenses.

Figure Out Your Own Needs

First, you have to make a list of your fixed expenses – those that won’t change once you retire. Then decide what hobbies, activities, and travel that you would like to indulge in once you’re retired.

Long term care insurance is a good purchase for retirees. It’s costly but not as costly as long term care. You may also want to see if you can pay off your mortgage before you retire. Then add inflation into the mix.

Perhaps you’ll come up with an estimate that’s close to the 80% rule of thumb. It’s more likely that your expenses will be closer to 90% of your working income when you retire. But that percentage should go down as you get older. Be sure to use your own needs as a guide when deciding whether you think about money needed for retirement.

Warren Paine

Warren is the senior mortgage loan officer who has worked in mortgages and loan industry since 1995. He study in Harvard and major in Finance with a Bsc. Honor Degree. He possesses a Paralegal Certificate as well.

Recent Content