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19 Apr 2021

A Completely Honest Retirement Guide to Personal Finance

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Approximately 10,000 people retire each day in the United States. For most, retirement happens at or around age 65 and, for many of those retirees, making the most of their savings is essential from day one.

Unfortunately, many adults aren’t saving enough to retire comfortably. If you’re one of them, you need to manage your finances well once you do retire to live a happy and healthy work-free life.

This means establishing a great retirement finance strategy before you take the leap and exit the workforce. If you’re not sure where to start, you’re not alone. But it’s easier than you might think.

Here are a few simple things you need to do to set yourself up for success throughout your retirement.

Check out for more on personal finance tips.

Set a Firm Budget and Stick to It

The best thing you can do when trying to manage your personal finances during retirement is to set a firm budget. Look at the amount of retirement income you bring in each month plus any additional income you receive through investments or pension plans.

Then, subtract your fixed expenses from that total. These are costs that stay the same each month like your rent or mortgage payment, insurance premiums, utility bills, and any other recurring expenses you might have. Then, factor in any fun expenses you have like going out to dinner or trips you want to take.

This is the amount of money you need to have on hand at all times to live comfortably without draining your savings account.

Try to keep your costs as close to that number as you can while you’re retired. If you consistently go over your budget, you’ll need to find ways to cut back. Remember, you’re on a fixed income, and earning more money isn’t always possible.

Enroll in Medicare and Supplement Plans

While you’re employed, you’re able to get health insurance through your employer. They help cover part of your monthly premium cost to keep expenses low. But when you retire, you’re responsible for finding your own health insurance.

The best choice for most seniors is to enroll in Medicare. This government-sponsored health insurance plan allows you to get the treatment you need without putting strain on your finances each month.

You’re allowed to enroll in coverage when you reach 65 years of age. Keep in mind that basic Medicare isn’t always enough. You’ll also want to invest in supplement plans to round out your coverage.

In most cases, Medicare will be cheaper than private insurance, so you’ll end up saving money and can use those savings however you see fit.

Take Social Security Out at the Right Time

You’ve contributed to Social Security for decades and, once you retire, you’ll be able to start receiving payments from that fund. Though you’re able to start receiving payments early, it’s best if you can wait.

The longer you can wait to start collecting your Social Security checks, the larger your payments will be. The extra cash can make a huge difference in how comfortable you are throughout your retirement.

This is especially true if you’re relying on Social Security as your main source of retirement income. The larger your payments are, the less you’ll have to stress about your retirement finances.

Be an Active Investor

By the time you retire, you’ll likely have at least a few investments that can earn returns every year. Though it might be tempting to leave those investments alone and ride out whatever the market throws your way, don’t.

Be an active investor and keep an eye on each investment’s performance over time. You may also want to expand your investments to further increase your portfolio and your returns. The best place to start is by speaking with your financial advisor or investment broker.

Ask them for recommendations and invest in the funds that make sense to you. If you have concerns about the investments you already have in place, ask your broker for more information. The better you understand your investments and the more proactive you can be, the larger your returns will become.

Don’t Hesitate to Ask for Help When You Need It

When most people retire, they expect to have everything figured out. Unfortunately, mistakes happen and if you find yourself in a tight financial spot, you need to find a way to correct the problem.

This means you need to be willing to ask for help when you need it.

Talk to your family and loved ones and ask for advice. Consider taking out a small personal loan to help you get your finances back on track. Whatever you do, don’t feel that you have to go through the rough patches on your own.

Embrace Technology When You Can

Technology is advancing every day and many of those advancements can help you better manage your retirement finances. Use this to your advantage.

Look for free personal finance apps to help you monitor your accounts and stay on top of your spending. This way, you’ll always have the information you need at your fingertips.

Many apps are usable on both phones and tablets, so you’ll be able to access your information regardless of the type of device you use. If you’re not sure where to start, talk to your personal banker. They’ll be able to recommend some great options and may even have a bank-specific app that can help you monitor your accounts.

Keep These Retirement Finance Tips in Mind

Creating a solid retirement finance strategy to help you live your best life once you exit the workforce is always a good idea. Keep these simple tips in mind and you’ll be able to manage your finances with ease once you put in your final two-weeks’ notice.

If you’re not quite ready for retirement but haven’t started planning for your future, don’t panic. It’s never too early or late to start saving and planning.

Check out this post for a few proven ways to make saving for retirement simple.