Expenses Continue Even After Retirement
Are You Ready?
When planning for your retirement you used a retirement calculator to determine your basic expenses but did you remember to include the unexpected ones. Unexpected expenses will always pop up; new roofs, new cars, inflated healthcare costs, etc.
They are called “unexpected” for a reason. You probably did not build a cushion into your calculations from the retirement calculator when determining how much money you would need to retire. So now you feel the pressure; you are in or close to retirement and are worried that you will run out of money. You are not alone, many folks feel the same pressure about how to make their money last as long as they do.
How To Outlive Your Money
You have 3 choices for outliving your money:
- Keep working of course.
- Keep saving even after you retire.
- Find a way to generate a steady stream of income.
Work, Not The Best Option
You can only continue to work for so long; you eventually may have to stop for lack of opportunity in the market or for health reasons. Therefore, working is not always the best option. Have a back up plan.
Never Stop Saving
Continuing to save even though you are retired is the best financial habit to develop. You don’t have to save as much as you did while planning for retirement, but save some amount every month for the unexpected.
Finding a guaranteed stream of income may be your best option. Nothing in life is guaranteed; except for annuities.
The guaranteed stream of income offered in an annuity is why they have become very popular. You invest a lump sum and the insurance company pays you back a monthly amount for the rest of your life.
Many retirees are annuitizing a portion of their retirement plan money to set up this guaranteed stream of income.
Do Your Homework
Annuities do not work for all investors so be sure to check with your financial adviser on whether or not an annuity works for your financial situation.
There are also different types of annuities and different features you can add on. By working with a financial professional you can also determine which type works best for you. There are fixed and variable annuities; joint and survivor benefits, inflation guard benefit and many more.
They Never Stop
Never for a moment think that once you reach retirement your expenses will stop; they never stop. Expenses are okay…if you are prepared for them. Don’t be caught off guard, be prepared, have the money set aside to pay for basic and unexpected expenses so you can enjoy your retirement without worrying about money all the time.