As you grow older and wiser, with retirement soon to arrive, you need to transition your finances to something new. Rather than focusing on the daily grind of your job, you instead will have lots of free time but a limited income.
With your sunset years approaching, you need to have a good financial plan for the near future. This includes how you’ll spend your money, what to do in case of an emergency, and what will happen to your assets after you pass away.
IRAs and Investments
In order to retire, you’ve probably been saving with an IRA, 401k or other retirement tool. Once you retire, rather than putting money in, it’s time for that money to start coming out.
But, a majority of your money is going to stay in your retirement fund for a long time. That means you need to manage your investments in it to ensure it is safe and still paying out enough.
In order to keep your finances safe, you need to put them into lower risk investments, such as bonds, term certificates, and high yield savings accounts. That way, if something does happen in the stock market, you don’t find yourself without any money.
Budgeting Your Monthly Costs
As you transition from your job into retirement, your income likely will change. Between social security and your retirement savings, you could either have an income decrease or increase. Either way, you need to plan for it properly.
Build out a new budget with your changed income. Along with retirement comes a few changes to your expenses. For example, you’ll qualify for the basic Medicare which can impact your health insurance costs.
Your new budget should also take in the changes for your retired life. This should include any new hobbies you are going to pick up to keep yourself busy, transportation costs with not having to drive into work but perhaps traveling more, and increased costs in medicine to keep your elderly body healthy.
Life Insurance
If you don’t have it already, it’s time to consider getting life insurance. Passing away is expensive on those you leave behind and life insurance can ensure they aren’t left burdened. Life insurance plans for the elderly can be expensive, but the extra coverage can go a long way in helping your loved ones.
There are two different ways to pay for life insurance, a yearly fee or paying once for the rest of your life. The yearly works like auto insurance; you pay for a year of coverage and if you let it lapse, you lose it. If you do a one-time payment, you get whole life insurance which costs much more, but doesn’t lapse. With whole life insurance, you can even use it as a resource in your retirement that you can tap into to pay for things.
Pioneer members do have access to buying affordable and reasonable life insurance through LifeHelp. Their agents can help you pick the right plan at the right rate.
Making a Will and Plans for Your Assets
Planning for the future includes your eventual passing. If you have assets, a Will can make this a lot simpler for your loved ones you leave behind, especially if you don’t have a spouse you are leaving everything to.
A Will can ensure your family and friends don’t fight over your assets and can instead focus on healing from your loss. A good Will so be comprehensive for anything of significant value such as:
- Your house
- Funds
- Cars
- Furniture
- Anything with financial value
You can also start planning and giving away your assets before you pass away too. For example, if you want to give money to your grandchildren and keep it protected, you can use Pioneer’s Uniform Transfer to Minor savings account. You open it in the name of your grandchild and can put money into it and when your grandchild turns 21, they gain access to it.
Learn more about a Uniform Transfer to Minor Savings Account