Retirement is an exciting time. After years of shaping your day-to-day life around a job, retirement can provide the welcome opportunity to explore other passions and contribute to society in meaningful ways you may not have had time for previously. Hopefully, you’ve been making financial decisions with an eye to retirement for many years, but wherever you find yourself now, there are things you can do now to help improve your financial situation in older age. Here are a few considerations you should take into account as a new retiree.
Budgeting for Older Age
Many new financial needs can occur during older age. Besides adjusting to the free time that comes with retirement, another one of the more obvious changes is not having access to the same constant flow of income you once had.
According to Forbes, 68 percent of Americans don’t save enough to enjoy a fulfilling retirement. In order to help combat this, it’s wise to sit down with a trusted family member during the first few months of retirement (or earlier) to discuss your savings and how to handle your budget. This will allow you to be realistic about your income and understand how much you can afford to spend.
Hopefully, you took the time to educate yourself about retirement and begin saving for older age when you were young. Now it’s time to take a look at the savings you’ve accrued and other sources of retirement income and reevaluate where you stand in comparison to your current standard of living, health needs and wishes for older age.
Do you have a clear sense of how much of your current standard of living social security and your 401(k) or other retirement plan will cover? Take the time to examine your finances and compare them to how you hope to live in retirement. If you aren’t seeing numbers you’d like, you may wish to explore options for part-time employment that will allow you to enjoy the benefits of retiring from your full-time job while making you more financially comfortable.
Considering Health and Caregiving Needs
Another expense that may occur during retirement is the need for home care or a move to an assisted living community. Before the time comes to make these decisions, it’s important to consider your options and plan ahead. Think about your budgetary constraints, but also where you will feel the most comfortable. Research your options so that you can prepare at your own pace.
If you anticipate becoming a family caregiver, as many older adults do, factor this into your financial planning. Educate yourself about other sources that may help fund your loved one’s care, such as disability or veteran’s benefits.
If You are Secure, Consider Sharing Your Wealth
If you are feeling financially secure in retirement, you may wish to consider options for sharing your wealth in retirement. Charitable giving can be a source of joy, especially if you can contribute to a cause you care deeply about. You may wish to give small amounts over time rather than all at once, so that you can reassess your ability to give if your circumstances change.
Some retirement plans require you to begin withdrawing a minimum amount after a certain age, whether you need the money or not. Consider giving a portion of this amount to charity, which can also offer you a tax benefit. Again, check your budget and stick to it so that you can share your wealth without causing problems for yourself.
Financial planning for retirement can seem overwhelming, but by taking things one step at a time, keeping a careful eye on your budget and educating yourself about your financial options you can empower yourself to enjoy a secure retirement. For more tips on for your retirement, take a look at the Chicago Senior Pulse Blog.