Under the heading of retirement this question seems rather ambiguous. Is it referring to saving up money before retirement or having a money plan once you are retired? I’m inclined to think it is the latter but I’m going to cover both just in case, because both aspects are important.
Retirement is a defining point in many people’s lives. This is the time of our lives where the toil and rushing are stripped as much away as we desire them to be and we are free to truly explore the notion of time on this planet. It is the most liberating thing imaginable and one last chance for us to find ourselves before passing on.
That is, if you have the money.
SAVING UP TO RETIREMENT
There are a lot of ways to save up to retirement and a lot of them are done for you. The government takes out social security…. but just ask any senior if that is enough to live on. Be prepared for uproarious fits of laughter!
You need another account. You have to make this sacred in your mind or else you will break into it prematurely. Try not to even keep any more track of it than is absolutely necessary to keep it alive and open.
Do the math now and decide how much you can allocate each paycheck or each year from your other accounts into your retirement fund. Make sure it does not cause a hit in quality of life as you know it because this will just give you incentive to take money from it. And once you do it once, it’s over. This account is everything.
SAVING AFTER RETIREMENT
Ah, you made it. Alive and wise and ready to live apart from earning. You have your saved money, even though there were some… issues along the way. There always are, my friend. You might be feeling the urge to splurge but this is where you need to examine things with the same decisive mindset that led to you having this saved money in the first place.
Basically, you need to figure out how much you are going to have to spread out your money. Don’t gage how long you think you have left, because that is too depressing. Just assume a healthy amount and then do the math. Make a financial plan that allows you to do all the living you want and still be content your money will be enough to last you for the duration.
This will keep you from the fear that paralyzes many retirees: that of running out of money.
A great tip is to keep the money that is in tax-deferred accounts like a 401k as long as you can and to tap into things like Social Security and Pension, which are not, for as much of your spending monies as you can. This allows for the highest financial gain in the long haul.
Have a backup fund if you can, something that is pure extra and should only be sued for emergencies. Review your spending at least every four months to make sure you are not exceeding your limits.
Be careful with your money. Rent things before buying them. Often a senior will buy something because they like it and then be stuck with it once the feeling ebbs away. Watch out for Internet thieves, because they are legion. And as far as what accounts you save in, look around and try to find the best rates to maximize your return on investment.
Don’t be afraid to use your senior ID! I have known some ladies who just met the standard who were too ashamed to do this…. And now are worse off than those who swallow their pride and do the smart thing. You are probably never going to see these people again and who cares about a number anyway? Nobody worthwhile!
Here is the hardest decision: life insurance. This is very controversial so I’ll leave it up to you, but suffice to say that many analysts claim that a retiree would do better to save their money on insurance premiums and make their own plans, because most times the money saved will be enough for the procedures with more to spare. This is however a disputed claim and certainly continuing to pay the premiums seems to be the safer option, but it might be something for you to look into.
Find out if you still need a life insurance policy and exactly what the payout is going to be, and who will be getting it. Many retirees determine it is not even worth paying for and drop it.
And if it comes down to it, get a part time job.
CONCLUSION
The person who plans well and thinks through their actions on down the timeline will come out on top. Thinking ahead is the most critical thing, as well as shopping around. Following the advice above will result in you being in much better financial shape as you enter the golden years. But as I’m sure you know by now, gold is not everything. Good luck.