Retirement is the time to relax and reflect on how far you’ve come in life, however, if you manage your finances correctly your retirement can be some of your most affluent years. Here are some tips to managing your finances and savings during your retirement years.
If you’ve been saving and putting into a pension, you will have a nice sum of money that you can use during your retirement.
Though it might be enticing to spend a lot in one go once you have access to this money, it’s important to spread out your spending and carefully budget for the years ahead. Try treating yourself little and often rather than spending a large amount of money in one go as you might need this in case of an emergency.
It’s a good idea to split up your money into areas where you might need it most. For example, you could try splitting it into:
- Bills, weekly shops, subscriptions, and utilities
- Medical care (prescriptions, vet bills, any emergencies etc)
- Holidays and travel
- Treats and days out
- Gifting (grandchildren’s birthdays etc)
Those who are over 55 are eligible for an ‘equity release’ from their home. This is where some of the funds from your home can be released to allow for funds to use elsewhere.
If you’re unsure what your property is worth, it’s a good idea to calculate your equity release so that you can have a rough idea of how much you’d expect to receive.
This can be incredibly useful if you are looking to take on a big travel holiday and don’t want to worry about budgeting, or if you’re looking to do some big renovations to your home.
You can choose to take the money as one lump sum, in smaller increments or a combination of both. This can be useful if you are looking to travel soon and know how much you want to spend. Often, you can borrow up to 60% of your home’s worth, but this depends on your age and the value of your property.
Invest your money
You can also invest your money to make more, either so that you can do more with your retirement funds or so that your children and grandchildren can inherit it. The most common way this can be done is through stocks or shares in a business.
Be sure to do your research before investing and ensure that the company you are investing in is genuine, an investment scam could be incredibly costly.