Setting Out Your Finances: A Retiree’s Guide
Getting older is an inevitability, and something the vast majority of us approach not just with grace but with excitement. Each year passed is a year of gained experience, and a year closer to life free from the strictures of work.
Retiring is an ideal event, but something that not all of us are best prepared for; in spite of the excitement we feel for later life, we aren’t the best at prioritising our retired life over our present financial situations. In your retired life, you deserve to afford your ideal lifestyle – but this means putting in the work to make sure you’re financially ready for it. If you want to live life to the fullest, you should be starting to set that in motion now. How, though?
Create a Budget
Firstly, and perhaps most obviously of all, you’ll need a budget. Budgets are crucial for any and every financial wrangling you undertake, and especially so for your retirement. Start with the life you intend to live after retiring; what will it cost you, on average, to live your ideal lifestyle week by week? Work back from here, by figuring out your fixed costs. Will you have paid your mortgage by retirement? Will you have any outstanding debts, or costs relating to dependents? Be sure to factor these in.
From here, you can figure out if your current financial situation will allow for your future financial freedom. What is the state of your pension, and are you maximising payments into it ahead of retirement? The sooner you do so, the more you benefit. If you’re seeing a shortfall, then this is evidence that you may need to utilise other means of financing – which we’ll examine shortly.
Consolidate and Simplify Accounts
As you near retirement, you’ll find that you have less need for complicated financial products. You might be making the most of unique deals and arrangements with different banks and brokers, but you can start to consolidate your accounts as it becomes more likely that you’ll be needing your money. This is not only to give you more immediate access to your existing funds, but also to minimise the administration required to keep track of everything.
Opportunities Specific to Later Life
As you approach retirement age, new and helpful financial opportunities start to present themselves to you. Chief amongst them are pension cards for public transport, which can dramatically reduce outgoing costs with relation to day-to-day travel. There are also discounts you may be eligible for in supermarkets or on the high street, which further reduce costs.
On the financial products front, as an over-55 you can access equity release products – which effectively pay out part of your home’s value in advance, in exchange for interest payments and a portion of your home’s profit when it eventually sells. This chunk of cash can be especially useful for quality-of-life improvements, or even to fund a major bucket-list holiday.
Protect Against Fraud and Scams
Some schemes are best taken with a pinch of salt, though, and as a pensioner you may find yourself more susceptible to fraud. Ensure you stay vigilant about your financial situation, and be sure to monitor your bank and credit card statements for unauthorised transactions.
