How to Minimize You and Your Family’s Financial Stress During Retirement
Do you approach the idea of retirement with a sense of expectation or anxiety? Your answer depends on how well you’ve prepared for your retirement.
If you’ve planned well ahead of time, then you’re probably looking at your retirement as a time to only focus on working on things that you love, like finishing that novel you’ve always wanted to write based on your amazing life.
If, on the other hand, you feel anxious about it, then it’s because you haven’t created a plan and wonder what you’ll do when you no longer have to go into work and enjoy the benefits of a steady paycheck. Still, it’s not too late to create a plan. Here are some steps you can take so that you can start looking forward to retirement:
1) Get a Final Insurance Policy
There are numerous expenses incurred when someone dies, and the total cost can be as much as $10,000. For instance, there is the cost of caskets, embalming, headstones, funeral services, and so on. Final expense insurance helps with covering costs when you die and is a way to protect your loved ones from having to figure out how to pay these out-of-pocket expenses.
2) Find a Certified Financial Retirement Planner
Trying to figure out what to do to organize your finances during retirement can be daunting if you’re not familiar with finance. However, even if you are knowledgeable about money management, use financial software, or have a certified financial planner, it’s always a good idea to speak to a certified financial retirement planner. If you’re doing your own planning, you’ll have someone to fine-tune your ideas; if you’re using software, this will only give you limited options, and if you’re working with a financial adviser, they will be familiar with investments but only have a vague idea about how to create a comprehensive retirement plan.
A professional advisor who has specialized in the retirement niche will be able to give you sound advice on how to cope with the loss of income after a spouse dies, advice on when it’s the best time to take out your Social Security, and advice on how to pay taxes after retirement. You will also need someone who understands Medicare, estate planning, and other specific retirement issues.
3) Learn Basic Money Management Skills
While you probably have a good idea about how much money you earn and what you spend it on, it’s still important to have a formal system for keeping track of your money.
Here are two steps to take to manage your money better:
First: find out how much you’re spending. What are your fixed costs and what are your variable costs?
A Balance article, What’s the Difference Between Fixed & Variable Expenses, provides some good definitions.
“Fixed expenses cost the same amount each month. These bills cannot easily be changed and are usually paid on a regular basis, such as weekly, monthly, quarterly or from year to year.”
“Variable expenses represent those daily spending decisions like eating at a restaurant, buying clothes, drinking Starbucks, and playing a round of golf with your buddies.”
By understanding these two costs, you can figure out a strategy for putting aside some money for your retirement savings. You’ll also be adept at an increasingly rare skillset: managing your money so that you live within your means.
Second: increase your guaranteed income.
Calculate the best time to apply for Social Security, find out about your company’s pension plan, and research variable annuities.
Third: consider non-guaranteed income sources from dividends, interest, and rentals.
Final Thoughts on a Secure Retirement
In conclusion, you need a solid retirement plan to feel optimistic about your retirement rather than hoping things will work out with health, taxes, and Social Security.
