Retirement is supposed to be an enjoyable, stress-free time in your life. You worked hard, put in your time, and were smart with your money so that you could spend your golden years doing what you really enjoy. But even with a good amount of savings, your finances can still be worrisome once you no longer have your main source of income to rely on.
Fortunately, just because you’re no longer working doesn’t mean that you have to watch and wait as your nest egg dwindles away. There are lots of ways for you to not only remain savvy with your money as a retiree but turn your savings into something even bigger. Here are just a few tips to get you started down the road!
Managing Your Finances
The way we manage finances has come a long way since everything was done with pen and paper or in your checkbook. Most banks offer mobile apps that allow you to view all your accounts, activity, and even transfer money and deposit checks. Many also offer an expense tracking section within their app that lets you easily track spending which can help you develop a budget.
Using your bank’s app to keep track of your finances can work extremely well if they aren’t too intricate. If your finances are complex, you can consider hiring an accountant or bookkeeper to monitor your money. If you go this route, it is important to remember that there is a difference between bookkeepers and accountants.
While both can accurately keep track of your finances, accountants generally have much more education under their belt compared to bookkeepers. While a large part of what an accountant does is exactly what a bookkeeper does, their high level of education permits them to do much more. Accountants can take care of your taxes and make sure that you are getting the best possible return, make suggestions for investment, and optimize your budget.
However, bookkeepers should not be discounted. While accountants are able to do more, bookkeepers can still track all of your expenses and provide you with a detailed report that will make doing your taxes and setting a budget for yourself much easier. They also cost significantly less to employ than a Certified Public Accountant.
Making Money After You Retire
There’s no reason that you can’t continue to be profitable once you’ve made your exit from the professional field. Playing it safe by putting portions of your savings into low-risk annuities and municipal bonds is all well and good, and can help your money stretch further, but if you’re really inclined to, you can make your savings generate some serious cash.
There are now a bevy of investment apps available on the market today that makes investing incredibly easy. Most allow you to specify whether you would like to adopt an aggressive, moderate, or conservative investment style for your portfolio and will purchase and sell off stocks accordingly. If investing doesn’t appeal to you or you require a large amount of capital quickly, there are alternative financial solutions available in the form of bridge loans which are loans given in between two transactions, such as buying or selling a home, or borrowing against a life insurance policy.
You might find that you have a hard time adjusting to retirement from your fast-paced career. If this is the case, you’re not alone! Due to changing retirement ages and a shifting retirement landscape overall, more and more boomers are choosing to become entrepreneurs during their retirement. Trying your hand at being an entrepreneur can be daunting considering the amount of capital involved, but pursuing your interests and financing start-up businesses can often yield huge profits if done sensibly.
Eliminating Outstanding Debt
Finally, just because you have retired doesn’t necessarily mean that you made it to retirement debt free. Managing debt is a serious stress-inducing factor for anyone, but can especially affect retirees as the money that they have saved up is often the money they plan to spend throughout the rest of their lives. Unfortunately, sometimes your financial survival needs more than a bank account and a stash of cash for emergencies.
According to Time, the largest source of debt for individuals in retirement age is from their primary residence. While refinancing your mortgage can help you to pay off this debt faster, there are risks involved. For instance, a mortgage will generally run on a 30-year term, and for those in retirement age, a loan term of that length can be troublesome due to health concerns. You can set up a 15-year mortgage term, but if you do, make sure that you have enough sources of income available in order to pay the higher payments. If done properly, it is possible to get rid of your home debt relatively quickly.
Beating credit card debt can also pose a challenge for retirees with limited income. Developing a plan of attack for your credit card debt can help you to rid yourself of it quickly, minimizing the amount of interest you pay on it. One good tip is to target your smallest debt for elimination first, as this will shrink your list of debts, giving you one less thing to worry about each month. Another good idea is to then target the debt that has the highest interest rate and implement the most aggressive repayment strategy that you can. This will tackle the debt that accrues the most interest, ultimately saving you the most amount of money if you get it out of the way quickly.
Planning your entire working life to have a quality retirement often is just not enough. Unexpected costs or emergencies can put a significant dent into your savings, leaving you wondering how to pull yourself back up. These tips, when properly implemented, can set you on the right track financially, letting you get the most out of your retirement.