4 Tips for a Financial Worry-Free Retirement

Tuesday, September 23, 2014

 

Continued financial health is by far the biggest worry most people have in the years and months leading up to retirement.  Your best bet is to sit down with a certified financial planner to discuss how your income can best support your retirement vision.  Obviously, the sooner you can put a plan in place, the better for your projected income, but even if you’ve left it to the 11th hour, it’s never too late to sit down with a planner to hammer out a budget regardless of how lackluster your savings appear.
Regardless of whether you begin the process at age 16 or 65, below are the four tips that almost all financial planners agree should be carved in stone: 
Never spend your savings.  This is a mistake that many new retirees make within the first year of retirement.   A healthy bank balance can be tempting, but keep in mind your reduced capacity to replace funds.   You can work with your financial planner to establish a monthly living allowance that releases funds from your retirement fund on a regular basis much like a paycheque. 
Stick to a budget.  It’s tempting to live beyond your means, but keep in mind that reduced earnings may equal a less extravagant lifestyle – especially if you delayed contributing to retirement savings.  When putting together your budget, keep in mind that your income isn’t the only thing that may be curtailed.  You may be called upon to pony up for expenses like car payments or health club memberships that were previously covered by your employers. 
Invest in a health insurance plan.  Many people fail to realise the extent of what the health insurance plan previously provided by their employer covered.  You will want a robust plan that ensures you won’t be dipping in to your savings for unforeseen circumstances
Retire debt-free.  Pay off large debts (like mortgages) prior to retirement, and consolidate what you can’t pay off.  Simplify your finances as much as possible to free up your retirement income.

Continued financial health is by far the biggest worry most people have in the years and months leading up to retirement.  Your best bet is to sit down with a certified financial planner to discuss how your income can best support your retirement vision.  Obviously, the sooner you can put a plan in place, the better for your projected income, but even if you’ve left it to the 11th hour, it’s never too late to sit down with a planner to hammer out a budget regardless of how lackluster your savings appear.

Regardless of whether you begin the process at age 16 or 65, below are the four tips that almost all financial planners agree should be carved in stone: 

Never spend your savings.  This is a mistake that many new retirees make within the first year of retirement.   A healthy bank balance can be tempting, but keep in mind your reduced capacity to replace funds.   You can work with your financial planner to establish a monthly living allowance that releases funds from your retirement fund on a regular basis much like a paycheque. 

Stick to a budget.  It’s tempting to live beyond your means, but keep in mind that reduced earnings may equal a less extravagant lifestyle – especially if you delayed contributing to retirement savings. When putting together your budget, keep in mind that your income isn’t the only thing that may be curtailed.  You may be called upon to pony up for expenses like car payments or health club memberships that were previously covered by your employers. 

Invest in a health insurance plan.  Many people fail to realise the extent of what the health insurance plan previously provided by their employer covered.  You will want a robust plan that ensures you won’t be dipping in to your savings for unforeseen circumstances

Retire debt-free.  Pay off large debts (like mortgages) prior to retirement, and consolidate what you can’t pay off.  Simplify your finances as much as possible to free up your retirement income to enjoy your life - you've earned it!