Handling Your Money Better In Retirement

As we approach our retirement, we can tend to get quite a mixed bag of feelings, thoughts and emotions. For those who are unprepared or unclear what their retirement may hold for them, anxiety and maybe some fear might be swirling in your stomach. And then there are those who are prepared. For those prudent individuals that were able to make the long term plan and stick to it, a sense of confidence or at least comfort is present. When it comes to this point and you have your retirement financially mapped out, it is important to remember that there is still much to learn, even at this stage in life. We would all like to think that we know just about all there is to know, and that we have things figured out by now. Well, unless you’ve been retired before, this is going to be a brand new step in your life. And just like adulthood, marriage, and children, a change in the stage of life means a change in finances. Most people enter retirement with a sense that their money can go farther than it actually can, or worrying that they will simply not have enough. Both of these are common ways of thinking and not inherently wrong. Just as long as you make sure you’re ready to make the financial adjustments in retirement.

The first thing that needs to be done, is taking a big step back. Although you will have all the free time you ever needed to crush your goals, retirement is definitely still a long run game. In retirement, it is the little things, and consistency that will make or break it, especially if your budget is more stringent. To make sure your habits are on point, you need to know what you are planning for in your retirement. Are you going to pursue that personal passion, travel, work part time, or not work at all? No matter what the situation is, every retirement is different and every one needs a plan. Once you know what you want to do with your golden years, put a dollar sign next to it. It’s important to plan for the retirement that you want.

Now that you know the number you need, it’s time to do the easy part. Trim the fat. This part may be hard emotionally, but at least it’s simple. Get rid of everything that you don’t need in your budget. Lowering your retirement costs can be done very easily with the right timing and patience. Let’s get the elephant out of the room first. Pay off your mortgage. When you are able to fully own your home, not only is it a great feeling to say that everything around you is truly yours, but it is also a weight lifted off of your shoulders as well as your bank account. An even better way of tackling your mortgage is by using the money you would have paid it off with and out leverage it. It might seem like a tempting offer to pay off your mortgage entirely, that money can go to work to not only control your mortgage payment, but make you money as well. If your home is too much for your wallet, you could also downsize and spend your golden years beyond the front porch. And if you do plan on moving because of your home, maybe going somewhere that your dollar can stretch would be a wise move as well. A plane ticket a few times a year is a lot cheaper than trying to keep up with the cost of living in places like California and New York.

Take a look at your finances as well. With all this time on your hands, properly filing your taxes and reorganizing your budget will be easy. This could also mean reducing your investment fees by investing in simpler cheaper financial vehicles. This also means avoiding retirement penalties. That means pushing your Social Security withdrawals as long as possible. It is definitely worth it. But this definitely means that you have to watch the biggest retirement cost. Your healthcare. Health costs are the largest and most unpredictable in retirement, so it is important to take control of this section of your finances sooner than later. No one wants to have a health problem only to get the bill and find out that they were not covered by their insurance company. To avoid this look into supplemental plans that can cover the gaps in, well, in your coverage. Also make sure to research Medicare part D every year as it changes annually and it’s important to ensure that you are getting the best deal possible. After all, you provided funding for Medicare with your taxes for years. It’s not just time to get not just what you deserve, but what you already paid for.

Outside of this, simply watch the times when you want to travel and avoid the peak times, to avoid that peak pricing. And make sure you collect that senior benefit everywhere you can. Respect from the young is nice and all, but some extra money in your pocket means quite a bit more. Remember to always observe your finances and don’t ever be stagnant. Your golden years depend on you, so do what you can now, so you can do what you want later. Remember, Plan Smarter Live Better.