Your retirement is a life event that impacts every aspect of your lived reality. Financial stability becomes an important concern that you cannot help but stress over. After all, even if you have been saving up for your retirement very diligently, your funds are not inexhaustible, and life may not go as planned. Therefore, you need to make every penny count so that your retirement savings last longer. Here are our smart tips that may be of help to you.
Save for the “Rainy Day” separately
Wealth Management experts recommend that everyone must cater for the “rainy day” and thus have at least four to five years of living expenses stashed away from retirement savings’ schemes. In the case of unforeseen emergencies or unfavorable conditions in the stock market, this money can be your savior. For easy liquidity of these funds, you may have them saved as a laddered bond portfolio so you can access them as and when you need.
Pre-plan your health expenditure
We are all aware of the fact that health issues are difficult to predict, especially in the elderly folk. Even in you are a reasonably able-bodied and healthy individual, you need to plan for the unfortunate circumstance of a catastrophic illness. Make sure you have a health insurance cover that caters for mid-term disability and long-term care, for both you and your partner. That way, you are secure against sudden health-related expenditures which would otherwise strain your finances heavily.
Find intelligent ways of circumventing taxes
Whenever making investments for fruition in your retirement, be aware that taxes are going to eat into your earnings. Retired individuals bank upon returns on their investment, without figuring in the taxes that are going to be levied on them. So, it would be prudent to invest in schemes and funds that allow for tax-sheltered assets to be withdrawn tax-free. Consult an experienced Wealth Management Expert regarding the same and make the right decision.
Get a Life Insurance and/or Annuity
Though the suitability of both Life Insurance and Annuity depends on the specific situation/outlook of each individual, you must at least consider such investment. With a Life Insurance policy, the spouse who passes away first will have secured their partner’s survival with tax-free benefits. Concerning annuity, having a regular income is important to some people; thus, an immediate annuity that converts part of savings to a lifelong stream of income would be suitable.
Work post-retirement as well.
It is widely believed that depending on your investments and savings post-retirement is not the wisest move. You should try and keep working as long as possible, so you have some extra cash flows at your disposal. Taking up a consultancy, freelance projects and even low-risk entrepreneurial ventures is a good idea. Look for sources of income that are non-taxable, and you’ll find your retirement will not turn into a money mongering exercise for sure.
Downsize your assets and earn more
A lot of times, people are unconscious about the equity in their own homes. There are numerous assets you own which add no value to your existence beyond a certain point. Consider downsizing such assets as well and take to selling them off in return for some extra cash. If you have more immovable assets such as property and houses as well, you could look into rental/sale options for those too. The bottom line is, you need to assess everything you own and derive maximum value from it in cash terms.