5 Money Management Tips for Retirees — The Kind Tips - Tips for Life, Study, Work and Entertainment

5 Money Management Tips for Retirees

6 Money Management Tips for Retirees

Retirees usually live on a combination of pensions, savings and government provided social security checks. There are some common financial challenges that a retiree may encounter with, including budgeting, health care costs, costs for grandchildren, fund for charities, and effect of inflation as well as travel abroad. All the above needs have to be met with careful planning and determining of your needs, desires, wants and priorities. Here we select six most important tips for retirees to perform better management of their finances.

1. Prepare a budget.

You should prepare a budget that includes all your monthly income and expenses. Set aside at least 5 percent extra fund as the emergency fund for unexpected situations. If you have no idea about your expenses, grab the latest bills and write down the costs to get a rough idea. You should be aware that retirement is not necessary meaning lessened expenses—although you don’t have commuting costs, you have other costs to cover, such as medical co-pays.

2. Consider the effect of inflation.

You should take inflation into account. If you are retiring in the next two decades, the same amount of money will not be worth as much as it was. You should at least prepare for a three percent inflation for retirement of every year.

3. Get your family member involved in the retirement plans.

Involve your family members in all of your retirement plans. Maybe you have retired, but your spouse is still working. It makes sense that one of your keep working. Retirees are allowed to earn income of certain amount per household each year and still qualify for Medicaid and social security. Once the sum is reached, a worker has to pay extra taxes that take in account the yearly household income including social security.

4. Think about a part-time or volunteer job.

Holding a part-time job is beneficial because it can keep retirees fit mentally and physically. A part-time job can also earn retiree some extra money that can be used for special treats for your family such as nice dinners and new transportations. It also provides the chance to interact with others and be part of the camaraderie in workplaces. In certain areas, senior workers are very welcome since they have decades of working experiences and can mentor younger workers. Volunteer job is another good option. If you were a nurse, you can volunteer at a local hospital or medical school. If you have been always stayed with children, you can volunteer to read during story hours in a public library. Doing volunteer jobs allows you to explore new fields using your valuable knowledge and experiences.

5. Allow some risk for investments.

The bulk of your savings and investment should be kept in a safe fiscal vehicles, for example, bonds, treasury bills and annuities. You will also want to allow at least 10 percent of your capital to be invested in risker ventures like individual stocks. By combining the safe and risky investments, you will be able to hedge against inflation as well as provide some unexpected financial rewards.

*Image source: http://www.moneymanagerslive.com/paragonwealthmanagement/2012/01/tips-for-working-seniors.html

You May Also Like: