Many people believe that, once they have retired, they have “made it” — financially as well as with regard to lifestyle preferences. However, retirement doesn’t mark the end of the journey. Indeed, if you plan to retain your financial freedom during retirement, it is vital that you adhere to sound financial principles. Here are 4 financial principles to follow during retirement:
1. Keep Your Spending Moderate
You want to ensure that your spending is moderate during retirement. If you are drawing on a retirement account, the difficulties — and the ups and downs — sometimes encountered due to the financial markets can mean that your capital is drawn down faster than you imagine. It is important to keep your spending moderate, and remember to live within a pre-determined income. Retirement should not mean the end of all restraint regarding your spending; on the contrary, you should continue to pay attention to your spending, tracking it and living within your means.
2. Protect Your Assets
Retirement is a time when it is possible that you might let some of your insurance policies lapse. You want to be careful, though, to continue to protect your assets with a reputable company like Castle Cover, or some other company that specializes in over-50 insurance. Home insurance, auto insurance and other types of insurance are important. If you have a life partner that relies on you for income, life insurance is also still important. You should also consider long-term care insurance, since you don’t want a prolonged stay in the hospital or a nursing home to completely deplete your finances. Make sure to protect your assets during retirement, and you will have less to fear from catastrophe.
3. Keep Up Your Health
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While retirement is a time for some indulgence, it is important to keep up your health. While health insurance can help you offset some of your costs, it is still better to prevent health problems. Continue to exercise, and eat right. Poor health is expensive, no matter your health insurance situation, nor the health care provided by the country in which you live. One of the surest ways to protect your finances is to protect your health. Good health ensures that you are able to enjoy the fruits of your labor.
4. Plan for the Disposal of Your Estate
It might be unpleasant to consider your eventual demise, but estate planning is essential during retirement. Think about what you want done with your assets when you are gone, and also prepare for your own maintenance in the event of a potential decline in faculties later on. Now is the time to make sure that power of attorney, health care proxy, and the establishment trustees are all determined upon. Double check your will, and consider your beneficiaries. Consider different options for your assets, including trusts, that can protect your assets and ensure that all is arranged according to your wishes.
Retirement requires the careful management of your assets, as well as planning for what may happen to them later. With careful planning, and adherence to strong financial principles, you are likely enjoy a comfortable retirement, and outlive your money.
Miranda is freelance journalist. She specializes in topics related to money, especially personal finance, small business, and investing. You can read more of my writing at Planting Money Seeds.