Retirement can be one of the most enjoyable times in our lives. There is no longer a need to set an alarm clock or sit in traffic during rush hour. Instead, you control what you do with your time and live life according to your rules. However, this may be difficult if you aren’t financially stable. How can you ensure your financial security after you retire?
Take A Part-Time Job
Although you may be done working full-time, it doesn’t mean that you have to stop working entirely. Retirement may provide an opportunity to work a seasonal job at the golf course or work a few afternoons at the bowling alley. In addition to any employee perks you may receive, part-time work can provide a nice boost to your weekly or monthly income. In fact, you may be able to put some of that money into your IRA where it can compound and help you further solidify your retirement.
Become More Conservative With Your Money
If you still have money in the stock market, now is not the time to go after those growth stocks. Instead, it is time to put your money in bonds or other government debt where you know that your money will be safe. Index funds may also be appropriate as the market tends to appreciate at a predictable rate over time. It may also be worthwhile to look into real estate or precious metals like gold that rarely lose value over time.
Have Adequate Life and Health Insurance
As you get older, the odds that you will get sick or suffer from a permanent disability increase. If you don’t have good insurance, you could spend all of your retirement savings on nursing home costs or the cost of medication. Life insurance policies may help you pay for some of these costs while also providing benefits to other family members if they rely on your income to get by.
Live Within Your Means
Retirement means that you may be living on a fixed or reduced income. Therefore, you may not be able to afford the home you currently live in or the car that you currently drive. Remember, you have to account for maintenance and insurance costs when calculating the cost of living in a home as well as property taxes and HOA fees if they apply.
If you want to travel or want to enjoy a lower cost of living, it may be a good idea to look into buying an RV or moving to a state like Florida or Texas where there are no state income taxes. Downsizing may also mean that you don’t go out to eat as much or cutting back on other forms of entertainment to help make ends meet.
Start Planning Today
Making sure that you are stable in retirement means knowing ahead of time how much you need to cover expenses after you stop working. Therefore, determine as soon as possible what your minimum net worth for retirement would need to be to feel financially secure when you are no longer receiving a steady paycheck. For those retiring today, that number could be as much as $1 million while younger generations may need as much as $2 million or more to retire comfortably.
While everyone wants to retire at some point, individuals need to know that they can live on whatever savings they have accumulated in their working lives. To do this, come up with a plan as soon as you start working that will help you determine how much you need, how you will get it and how to make your money last as long as possible when you do retire.