How not to run out of money after retirement
Living on a fixed income is never fun for a retiree, unless that fixed income is sizable. That’s why saving money in retirement is so important for most people, as well as sound financial planning throughout the life cycle. Here are some key strategies regarding how not to run out of money after retirement, because even though Dickensian debtor’s prison is no more, failure to maintain assets could result in your death, which is less than desirable.
How not to run out of money after retirement tip No. 1 – Save money first
Technically, this should go into action well before retirement. Saving money is something that sounds fundamental, but too few people have the personal discipline to make it happen. People don’t save enough because they’re afraid – afraid they can’t afford to keep a surplus, afraid because they’d rather keep up with the Joneses, or afraid that they’ll only let themselves down with their lack of discipline and commitment. Whatever the case, saving money through Social Security is far from enough, and most employees aren’t lucky enough to have a good pension plan anymore. Thus, retirees and pre-retirees must spend less, or work longer. Ideally, one would do both of those things, but neither amounts to a suitable retirement plan on their own. Thus, this list continues.
How not to run out of money after retirement tip No. 2 – Spend less after retirement
The not spending money train continues after you’ve hit retirement age. Working less means lower taxes on lower earnings, plus it will force you to be more efficient in the ways that you spend your money.
How not to run out of money after retirement tip No. 3 – Keep working after work
Just a few thousand more dollars is a great supplement to annual income. Why not pick up an extra job to do once option “A” is used up. Hobbies that pay are a great option.
How not to run out of money after retirement tip No. 4 – Start investing your money
Investing your money for maximum growth is wise early in your career, pre-retirement. Later on, being shifting some of those investments toward actual income that can be spent without depleting overall capital. With some retirement planning, your money only has to last for the rest of your life, provided you aren’t looking to put something away for family.
How not to run out of money after retirement tip No. 5 – Monitor your assets
You can’t predict the future when it comes to your portfolio, but you can prepare as best you can by observing historical trends. Keep that portfolio diversified so that it is resistant to dropping severely during a dry spell. Year-to-year fluctuations will be worth noting and reacting to.
How not to run out of money after retirement tip No. 6 – Respond to the changes
Speaking of fluctuations, if you begin to notice a decline in your assets, whether that decline comes from spending outpacing income or because of a drop in the market, you’ll need to adjust. That means that for the sake of economizing, you’ll have to spend less.