Day 31: GOBankingRates wants to help you Live Richer. Throughout the month of July, we’ll be sharing daily tips for how you can do just that, with advice on budgeting, saving, investing, making the most of your career and managing debt — plus money advice for every phase of your life. Check back each day during our 31 Days of Living Richer to learn everything you need to know to set yourself up for financial success and live the richest life possible.
After decades of hard work, retirement is the time to relax and enjoy your golden years. But it takes careful planning to ensure that you can live out these years feeling secure financially.
Here’s how to Live Richer in retirement.
Don’t Splurge Right Away
You may be tempted to plan that huge vacation or buy your dream car right after you retire, but it’s best to delay making big purchases until you have a good sense of how much you can afford on your retirement income.
Read Day 28: How To Live Richer in Your 50s
“My advice is to get a feel for your income versus expenses and gradually add the activities that you have looked forward to into the income and expense flow,” said Frank Drago, president at Nautilus Consultants. “After working for 30 to 40 years, the tendency is to fill the time with vacations, shopping, increased golfing or other activities — all of which cost money.”
Put Off Collecting Social Security
Financial pro Suze Orman recommends delaying collecting your Social Security benefits for as long as possible.
Check Out Day 27: How To Live Richer in Your 40s
“The benefit you can receive if you wait until you are 70 to start collecting will be 76% higher than the benefit that you get if you claim at age 62. That is a tremendous return,” the “Women & Money” author wrote on her blog.
Use the Bucket Approach to Budgeting
Budget for your long- and short-term needs separately.
Go Back to Day 26: How To Live Richer in Your 30s
“The first [bucket] is short-term needs — assets you have designated for targeted short-term expenses and six to 12 months’ [worth] of safety money,” Drago said. “Generally this is money that has a one- to three-year timeline. The second bucket is three- to five-year, or mid-term money. These are generally in more conservative investments such as bonds and CDs. Also, the second bucket replenishes the first bucket as you deplete those assets for immediate needs. The third bucket is your long-term planning money. The goal is to grow the assets and use them in the future to generate income or replenish the other two buckets.”
Get Expert Help
Retirement planning is a complex undertaking, so seeking a professional to help can be a worthwhile investment.
Read Day 25: How To Live Richer in Your 20s
“Working with a financial planner can be a smart way to stay informed along the way and tap the expertise of a professional,” Farnoosh Torabi, host of the “So Money” podcast, wrote on her blog. “To begin your search, ask friends, family and colleagues for their recommendations. Initial consultations with planners are generally free and that’s an opportunity to see if working with this person would be a right fit. Look for planners with the CFP or certified financial planner designation.”
Looking Back: Discover all of the tips in our Living Richer series from the month of July.
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