Even the most financially secure people worry about how they’ll feel when they stop earning a regular paycheck. Planning and financial education are your best allies for this new phase of life.
When retirement changes from a “someday” in the distant future to “next year,” many people become very anxious. Making a successful transition from a time of earning and saving to spending will be easier if you make some simple changes, educate yourself as much as possible about money and gain some focus on the financial issues that come with retirement.
The Military Times, in “How to feel more secure about retirement,” advises on how to set yourself up for success with the following tips:
1. Reconsider spending priorities. Without an income stream, managing financial resources must become much more exact because money isn’t coming in like it used to. Examine the spending items on which you can cut back or eliminate in retirement. Decide on a budget that’s going to make your retirement savings last. Find a budget app or software that works for your individual needs and use it.
2. Debt needs to take on a new light. Be careful if you decide to not pay cash and charge a purchase. If you decide you’re going to finance something on a credit card or use some other payment plan, be certain that you have the ability to make payments comfortably within your established budget. Also, make payments that are big enough to take a bite out of the principal, instead of allowing the debt to linger longer than necessary. There’s really no need to pay a lot of interest.
3. Study retirement financial literacy. Hit the books and read some more. Regardless of how financially savvy you think you are, educating yourself on the host of financial issues specific to retirees, such as Medicaid, Medicare, taxes, insurance, Social Security, and estate planning will be well worth the time. Read books, magazines, listen to a podcast, watch videos online and speak to an elder law attorney to create a plan. There are many resources available.
Start doing your research on retirement finances before retirement is around the bend. The more time you have to learn, the more time you’ll have to save, to plan, and to prepare for the unexpected.
Reference: Military Times (October 26, 2016) “How to feel more secure about retirement”