Your retirement is an important milestone that’s meant to be a reward for your many years of hard work. You’ll finally get rid of that annoying alarm clock that’s been waking you from your sleep for the last 30 years or so.
However, for many people, the transition into retirement can be overwhelming. Mere thoughts of retiring can trigger feelings of anxiety and unpreparedness because it comes with a huge change in your otherwise normal routine as you’re no longer employed.
This change is synonymous with the way you budget your money and manage cash flow hence the need for proper retirement planning. Planning for retirement is a long process involving many steps along the way. To have a comfortable and secure retirement, you need to establish a financial base that will cushion your expenses.
Whether you’re approaching your golden years or you’ve still got decades left in your career, we’ve created a list of tips that should help you plan for a fun and comfortable retirement.
In many instances, retirees can save good money and better their quality of life by relocating to a location that’s well suited to their budget and interests. Myrtle Beach, South Carolina, is an ideal location for retirees seeking a combination of sea-side living, great weather and a bit of adventure all on a budget.
The area has reasonable living costs, lower than both the state and national average, and the houses are affordably priced. South Carolina does not tax social security benefits and this provides a favorable retirement-income deduction when calculating state income tax.
Retiring to Myrtle Beach is a good idea since it already has a significant population of retirees. You will have a good community within your age group with whom you can enjoy the immense recreational activities available within the area.
Thanks to the growing retired population, the health services in the area are suited to tend to the older generation. Myrtle Beach has retirement homes and world class medical facilities with top of the line technology and treatment equipment available.
It’s far much easier to minimize your expenses when you know exactly how much it is you’re spending and on what.
To get a clear picture of your expenditure, you should try and create a record such as a spreadsheet or notebook where you put down every dollar you spend and on what. You’ll be surprised to find just how much you spend on the little things that eventually build up over the course of a month. Proceed to calculate what that cost per month translates to in a year.
For instance, if you’re spending $150 weekly on car fuel, that’s almost $600 a month and $7,200 in a year. With such detailed insight, you can dictate how much you should be spending on certain costs depending on your needs if you’re going to manage your money better.
Understanding your expected retirement age and your current age will help create the foundation for a well-planned retirement strategy.
If you have a short time between today and retirement, you need to focus more on your income and preserving capital. Your investment risks can’t afford to be high so try and look into investing in assets that are less volatile and can create income that you can use to live on such as bonds.
However, if you’re young and have about 20 to 30 years until retirement, you should be a bit free to put your money in riskier investments such as stocks. You need returns that will outpace the rate of inflation so you can have a strong purchasing power as you retire.
Having some money kept away in a separate account for unexpected expenses is a good idea. On a fixed budget, you might not have the flexibility for major expenses such as car repair, home renovation, or an unexpected stay at the hospital.
If you don’t have an emergency fund, now is the best time to set one up. But first, you need to consider how much you will be depositing monthly into the account depending on your monthly income as well as your expenses. You can make non-regular deposits but working within a tight regular payment structure will help you realize your objectives faster.
Going into retirement with a debt will be difficult since you’ll be living off of a fixed income. You will not have the assurance of getting more money to pay off the debt than while you’re working.
Making debt payments every month will also crowd out other much needed expenses. Therefore, it’s best to avoid debt or eliminate any debt you have as fast as possible if you’re going to save any money.
If you’re going to take any debts, make sure you choose those that are fundamental such as getting a mortgage. Housing costs are often the biggest expense for many households. As such, getting a mortgage now will work in your favor since you will be able to service it while you work so you don’t have to take one or pay monthly rent fees after you’ve retired.
If your debt seems too overwhelming to manage, consult a financial advisor to discuss what alternatives you can pursue. They may help you qualify for debt relief options that will ultimately help you live a more comfortable retired life.
The start of retirement should herald the beginning of a new chapter in your life, not the end of the book since your career does not define who you are.
Living on a budget is possible regardless of your income bracket. While the idea of adopting a modest lifestyle after you’ve worked for all these years, it may be necessary. You’ll find that you now have a smaller income, which makes it all so crucial that you keep a close eye on your expenses.
Make sure you strike a good balance between your expectations and a well-suited standard of living so you can enjoy your retirement to the fullest.