So you’ve finally done it. It’s your 66th birthday and you have just walked out of work for the final time. You have a huge sigh of relief and you think about all of the years of relaxing that lie ahead of you. Then, it hits you- the concern about how you are going to be able to look after yourself and your family. You begin to worry about whether your retirement is going to be enough and whether you are going to be able to continue to enjoy the lifestyle that you have previously lived.
These are all-natural worries as we enter retirement but thankfully, there are plenty of strategies you can take to make sure you have a strong and financially stable retirement for years to come.
1. Work out how much income you will need
The first thing you need to do is to assess how much money you are going to have in your retirement and how much you are going to need to live off each month. This may or may not be the same as when you were working. Some expenses may disappear, such as work transport, whereas others may increase, such as medical bills and different types of insurance.
2. Make sure you are ready for investment
Just because you have some money doesn’t necessarily mean that you need to invest it. The first thing you really need to do is to make sure that you are in a good enough position to invest your cash. You should make sure you check the following before you invest:
- Emergency money: If you have money put aside in your savings for your retirement, you should consider how much money you may need for any emergencies. You may have to pay a medical bill out of the blue or perhaps your boiler or something breaks at home and requires some money to replace. You should make sure that you have that money put aside before you consider investing in anything else.
- Do you need the money?: If you invest your money in something like stocks or bonds, you may not see a return on that cash for some time. You should always consider whether or not you can go a few years without that money. If not, then you shouldn’t invest it.
- Discuss it with your partner: If you are married, then the most important thing you should do is discuss all of these things with your partner. You and your partner are likely to carry the financial risks of investment together and as such, you should make sure that you are both prepared to invest that money.
- Debt: One of the first things you should assess when you are considering investing in your retirement is whether or not you have any outstanding debts. Your retirement can present you with the opportunity for an entirely fresh start but before you consider investing any money that you do have, you should work out if you still owe any money. If that is the case, then you should work out how to pay those off with a member of your family or a financial advisor.
3. Don’t discount inflation
A common mistake a lot of people make when they are planning for their retirement is that they fail to include inflation into their future calculations. This can prove to be a very costly mistake.
Prices aren’t fixed and they will fluctuate over the years, with the average rate of inflation being somewhere around 3%. The easiest thing to do is to make sure that you account for that when you are considering where to invest your money and how to save it.
4. Speak to a financial advisor
Of course, the most important thing that you should do if you are going to invest your retirement money in something is speaking to a financial advisor.
There are a lot of scam companies and tricksters who are trying to catch out older people these days and it is important that you understand exactly where you are investing your money before you consider parting ways with it.
A financial advisor will help give you solid advice and they may even have other contacts who are willing to help you invest your money in good places.
Before you consider making any other investments, a financial advisor could turn out to be the best investment you make.
5. Consult your family
As an elderly person, you may be particularly vulnerable to online scams or fraudsters and that is why it is very important for you to be completely transparent with your family members with what you are planning to invest your money in.
There are a lot of dishonest people in the world and on the internet, and they will not always have your best interests at heart. A close family member or someone you can trust will and you should be in contact with them before you plan to make any sort of big investment.
You should take the time to discuss any issues you have with a relative and always make sure you have a good phone for seniors available in case they need to contact you at any point as well.
6. Consider investing in real-estate
Depending on how much money you have and how active you are, investing in real estate can be an incredibly effective way of boosting your nest-egg.
Buying and then renting out a property can be a great way to give yourself a consistent income as you enter your senior years and it also provides you with a great piece of inheritance to pass on to your family.
One challenge that can come with this, however, is the upkeep and management of the property. A lot of older people don’t want the stress of having to manage a property or tenants. If this is the case, then you can always tie in a family member to deal with this for you, or you can hire somebody to manage the property for you so you can just relax and see a return on your investment.