By: Danielle Pacheco
Considering that we don’t know how long we’ll live, or what our future costs might be, running out of money during retirement is understandably one of the biggest concerns for retirees. The cost of healthcare is on a steady incline, people are living longer and let’s not forget – inflation. While proper financial planning can’t completely eliminate the risk of running out of money during retirement, it can make it less likely from happening.
Whether you’ve chosen to retire, or it’s been forced upon you, retirement is inevitable. The key to a comfortable retirement is proper financial planning and making sacrifices pre-retirement that allow you to save more for the future and to essentially enjoy retirement.
Minimising your fixed expenses (things that you can’t go without, i.e. food and shelter, etc.), starting a retirement spending plan where you set aside ‘fun money’ to do things during retirement like travel or enjoy a day out with friends, and monitoring the performance of your pension to ensure that you are getting good returns on your investments are all things that can contribute to a more comfortable retirement.
If you own your own home, in a lot of cases that is considered to be your largest asset and using it during retirement may be something to consider. You could potentially rent out your home and find somewhere less expensive to live while using the rental income to help fund your retirement.
Typically, people who are retired have been working for forty to fifty years and have developed some kind of skillset that may allow them to do some consulting while retired, which will also help to generate income.
Depending on your healthcare needs, you may want to look at the differences in cost between private and government health care, and even decide between a landline or mobile phone. These are just some ways to hold on to some extra funds.
Imagine you’ve recently retired, and a friend calls you one day to tell you that your favourite musical group will be performing in NYC next month and suggests that the two of you make a weekend out of it. Wouldn’t it be great to just say, ‘Yes, let’s go!’ without too much hesitation? Or on a smaller scale, a trip to the movies or how about a nice dinner out with friends? These are all things that can be achieved through proper financial planning and making small sacrifices pre-retirement.
Retirement is supposed to be a time of freedom and relaxation, when time essentially is your own. I met with a retiree and her husband recently, and while we were chatting about life and their retirement plans, her husband mentioned that he had recently retired and got rid of his watch and cell phone because he is now ‘On his own time’ – wow, what a powerful realisation!
In my position, I am fortunate enough to meet with such a versatile group of people; I take away a little something each time I meet with someone, and although it’s my job to educate people on the importance of saving for the long term, I walk away from each meeting learning something from each of my clients.
Whether you are 21, just starting out in life and are already thinking long-term, have elderly parents who are currently retired, and this has made you start to think about your own financial plans, or you are already retired, I believe that at each of these ‘stages of life’ there are ways to save.
Being able to fund your own retirement without relying on friends or family to help is a considerable achievement. With the proper financial planning set in place before retirement, this can be achieved.
‘Retirement is wonderful if you have two essentials – much to live on and much to live for.’ – Author Unknown
Danielle Pacheco is a Pension Sales Advisor at Freisenbruch-Meyer Insurance Services. If you would like any further details, please contact her at dpacheco@ fmgroup.bm or call 294-4660.