By Danielle Pacheco, Pension Sales Advisor at Freisenbruch-Meyer Insurance Services
The cost of healthcare continues to rise, people are living longer, and there are other factors that will contribute to how much is spent during retirement. If you’re still working after 65, then chances are it’s for financial reasons. In Bermuda, the Pension Act has only been in effect since the year 2000; therefore, running out of money during retirement is understandably one of the biggest concerns for retirees. While proper financial planning can’t eliminate the risk of this happening, it can make it a less likely occurrence.
There are several things that you can do that may contribute to a more comfortable retirement. For example, you can minimize your fixed expenses (i.e., things that you can’t go without such as food, shelter, etc.), and set up a retirement spending plan¬¬—setting aside money to do things during retirement like travel or enjoy a day out with friends. Monitoring the performance of your pension to ensure that you’re getting good returns on your investments over the years is also a worthwhile task to protect yourself.
Furthermore, if you own your own home— which may be your largest asset—putting it to work for you during retirement may be another thing to consider. You could potentially rent out your home, find somewhere less expensive to live, and use the rental income to help fund your retirement.
In addition, people who are retired have typically been working for forty to fifty years and may have developed a skill set that may allow them to do some consulting when retired—this could be a way for you to generate income, too.
Plus, depending on your health care needs, you could look at the differences in cost between private and government health care— you can switch to the less expensive option, if it makes sense to do so. You can also look at reducing other unnecessary expenses such as deciding between a landline or a mobile phone instead of having both. These are just some ways to hold on to some extra funds.
In my position at Freisenbruch-Meyer, I’m fortunate enough to meet with a wonderfully diverse group of people and, although it’s my job to educate people on the importance of saving for the long-term, each time I meet with someone, I take away a little something I’ve learned from my clients. So, whether you’re just entering the workforce and are already thinking long-term, or you have elderly parents who are currently retired—which has made you start to think about your own financial future—or if you’re already a retiree, I believe that there are ways to save at each of these milestones.
Being able to fund your own retirement without relying on friends or family to help is a considerable achievement, and with the proper financial planning put in place prior to retirement, you, too, can reach this goal.
“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 [email protected] or call 294- 4660.