Finances are a major concern for senior citizens. More often than not, they have reduced income and increased expenses. This extract discusses how to plan your finances to ensure financial stability once you retire.
Take An Insurance Cover
Insurance covers can significantly reduce your retirement spending. For example, medical insurance can help you reduce the amount of money you spend on medication to manage long term and age-related illnesses. Home insurance will come in handy if you have a fire outbreak in your home.
Enrol In A Pension Plan
Pension plans are the best way to save for your retirement. Typically, your employer will contribute a portion of your salary to an investment fund. Once you retire, you will receive these funds in lump sum or several payments. Over the years, your savings will have accrued significant interest.
Invest Wisely
You must be careful as you invest. A wrong decision could land you in debt or financial troubles. Below are some retirement investment tips:
- Hire a financial manager to help track your finances and advise on suitable investments.
- Know your risk tolerance. Do not put all your savings into a single investment.
- Have a long-term investment plan. The plan should consist of several short-term goals with the aim of achieving the long-term objective. For example, if you need to raise money to purchase a property, you could make short-term investments such as buying government bonds or REITs.
- Consider your interests when investing. For example, if you want to open a business, invest in something you are passionate about.
Downsize
It is probably the most challenging decision that seniors have to make. As you age, your children move out of your home. As such, you may not need a large property or many cars at home. Moving into a smaller property allows you to free some money for your retirement savings. Get rid of any equipment, furniture, or vehicles that you do not use.
Estate Planning
Estate planning is a sure way to secure your assets and investments when you are incapacitated or dead. An essential aspect of estate planning is the power of attorney. It is a document that gives an agent the right to make financial and medical decisions when you are ill. For example, the agent can manage your finances and decide whether you should go to surgery or be put on life support.
Retirement planning should no longer be a difficult task. Get appropriate insurance coverage, enrol in a pension plan, invest wisely, downsize and have an estate plan.
To learn more, contact a retirement planner
The blog covers the idea of financial planning from the perspective of the client’s perspective. It will look at the benefits and risks of certain financial decisions and help readers to work out where the gaps are and how they can be closed. Financial planning is about planning for your future life. It’s not about just money, it’s also about work, family, savings and retirement. I'm not a financial expert but I've always been extremely interested in this area. I've done lots of reading about the sector and the various factors which are taken into account when planning your financial future.