Managing Your Finances in Later Life – Some Top Tips
Staying on top of your finances is crucial at any age, but it can be especially important for older people. It helps you retire with peace of mind with enough money to cover your basic needs as well as any unexpected costs.
Budgeting in retirement
Whether or not you’re accustomed to budgeting, now is a good time to have one. Calculate how much you’ll need every month to manage your living expenses, mortgage or rent, home maintenance and grocery bills.
Find out how much you have saved in any retirement funds. Factor in how much you may also have in savings, investments. Work out how much you might also get from social security payments.
Your daily spending habits may decline once you finish working. However, you may want to travel more or you may have medical costs you didn’t have before.
There is no one-size-fits-all rule about how much you should withdraw each month. It’s a good idea to work with a retirement planner if you want to be sure.
If you haven’t already, it’s a good idea to write your Will and do this with the help of a qualified solicitor. It is best to do so after you’ve taken stock of your savings, debts and any assets you own. If you don’t leave a Will, the rules of intestacy will determine how your estate will be distributed. Certain loved ones may lose out.
This is also a good time to get an over 50 life insurance policy too, if you don’t already have one. You’ll pay a small amount into it each month so that when you pass away, your loved ones will get a payout.
Organising your savings
Over the years, you may have started several savings accounts. It’s a good idea to take stock of these now. Want to simplify things by combining them into one account? Scour the market and find one that has a more favourable interest rate. Then, transfer your funds to this.
If you are still working but looking ahead to retirement, consider boosting your pension savings. If you’re lucky enough to have a little bit of income leftover each month, you may be in a strong position to do this. There are various benefits to this, such as tax relief and exemption from inheritance tax.
You may find you have multiple pension pots. This is the situation many people find themselves in after working for several employers. Check out each one and decide whether you’d like to combine them into one, for simplicity’s sake. If you’re not sure, a pension advisor may be able to help you with this.
When you’re entering any new life stage, it’s important to have a financial plan. This has never been more important than in retirement.
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