Retirement is a time when seniors adapt to many changes. You’ve spent your life building up a retirement fund to live a comfortable life, but even with your savings, you’ll likely need to make adjustments in your spending. Keep reading for tips on how to make the most of your money post-retirement.
Understand Your Social Security Benefits
Just as you’ve been saving for retirement all these years, you’ve been putting away money toward social security. Make sure you understand your individual social security benefits and what you’re supposed to collect monthly. Everyone is different, but the golden rule of social security is not to rush to collect your benefits.
Most people start collecting social security when they hit “retirement age,” or 65. You can start collecting social security as early as 62. But, there is a catch. If you begin collecting early, you reduce your benefits and possibly your spouse’s as well.
For each year you wait to claim social security, your benefits increase as much as 8 percent. Before making the decision to collect, think about your financial situation. It could be worth it to delay your claim and earn a larger monthly pay out later.
Keep Track of Your Money
A shocking 65% of Americans don’t have a post-retirement budget. Budgeting after retirement is more important than ever before. For the first time in your life, you’re living off of a fixed income or lump sum.
Take the time to talk about your finances with your family or a financial advisor. They can help you put a realistic expense plan in place. An expense plan will give you better perspective of your own financial status. It will also prevent you from overspending or making unnecessary purchases.
As you enter retirement age, you’re more likely to become a target for scams. Having a budget will allow you to notice possible problems sooner if there are irregular withdrawals on your account. That said, if you get an offer that sounds too good to be true, always ask for a second opinion. It’s easier to prevent fraudulent behavior than it is to recover what is taken.
Make the most of your finances by planning ahead. Later in life, there are still financial responsibilities for which you need to plan if you haven’t taken care of them yet. For example, wills and other end-of-life planning are important matters that protect you and your family emotionally and financially.
It’s important to plan your spending on health insurance. Do a bit of research to understand your benefits. Insurance policies may be more expensive than you think, but there are ways to save. Have open conversations with your doctor about discounts, generic drugs and your deductible options.
Funeral preplanning is a rising trend that offers you many benefits. Besides documenting your final wishes, you can save yourself and your family from increasing funeral costs (they tend to double every 12-15 years). Most funeral homes offer flexible payment plans that work with your budget. This helps you avoid an unexpected financial burden when you or a loved one passes away.
To learn more about how preplanning can save time, money and worry, download our ebook, The Seniors’ Guide to Funeral Arrangements. Click the image below to get your free copy.
Disclaimer: Busch does not serve as a financial advisor and this blog post should not be viewed as financial advice.
Image Credit: American Advisors Group via Flickr