Is 2017 your year to retire? As you approach retirement, you are genuinely excited to be entering a new phase of your life after spending almost every weekday for a good portion of your life working, making money and saving for the future.
That future is now the present, and with it also comes some questions. When working, you were able to save at a regular basis. But now that your retirement years are here, you may have questions about how to make your money last.
You’ll first want to start with a financial plan. Track your monthly expenses as best you can. These may include a mortgage that has to be paid off, potential moving expenses, travel costs and existing forms of debt.
There are numerous ways you can ensure your money lasts the rest of your life.
Move and Downsize
While raising your family, it’s likely you moved into a larger home. Now that your children are on their own and maybe even? raising their own families, you could benefit from downsizing. Consider moving into a house or condo that doesn’t have as many stairs or as much space to maintain.
Downsizing is beneficial for a few reasons. You will be able to add the money from the sale of your current home into a savings or spending account, and you won’t end up paying as much in property taxes if you decide to move into a smaller home. If you move into a condo, there will be homeowners association fees, but no costs associated with maintenance or anything similar.
Additionally, as you continue to age, your body isn’t the same as it was 20 or 30 years ago. Going up stairs gradually becomes more difficult. If you decide to move into a smaller home, look for something that is one floor and doesn’t have a lot of stairs.
Have a Separate Fund to Pull From
Even though you can start taking money from your 401(k) and Individual Retirement Accounts just before you turn 60, you don’t want to rely on these funds to pay for everything.
Ideally, you should have an emergency account that contains roughly six months of living expenses. This can cover anything that pops up unexpectedly, such as hospital visits or car repairs.
Continue Investing, But Simplify
If you want to make sure your money lasts, you have to continue investing. Still keep money in stocks, but you’ll also want to consider simplifying your investments. For example, think about consolidating your assets to one financial institution so it’s easier to manage everything.
It’s important to know what exactly your risk level should be, however. You still need room for growth, but you don’t want to put all your money on the line.
For your entire working life, you saved for retirement. Now that you have finished working, you need your money to last. By creating a sound financial plan and monitoring your spending, you can enjoy retirement to the fullest.