When it comes to saving for when you retire, at the very least you want to ensure that you’re going to have enough to pay for your living costs for the rest of your life. However, what you probably want to be aiming for is a nest egg which allows you to truly enjoy your life after work and do all the things you’ve planned for as you’ve saved. Some pensioners find themselves in a position where they have to compromise on what they can do during their retirement simply because of a lack of funds. So here are our top tips for retirees to help avoid finding yourself in that position.
1. Commit more time to saving money – Once you retire, you’ll have a great deal more time available to you, meaning you should find it easier to spend time doing things that will help your money go further. One way of doing this is through a part-time job; but if you’re not keen on going back to work once you’ve retired, take time to collect coupons and hunt down special offers which you might not have had the time to do when you were working. This will help your monthly income go further.
2. Consider your risk/balance – Most pensioners opt for low-risk investments as they depend on their pension and are not in a position to recover should the risk fail to pay off. However, taking calculated risks could help yield greater returns without opening yourself up to financial jeopardy. Deciding how much of your portfolio you’d be happy to put in higher-risk investments will be an individual decision, but is an option to consider as it can be a successful way to add to your pension at the same time as drawing down from it.
3. Make sure you’re not paying too much in tax – Whilst you’ll never be in a position to pay no tax at all, your tax commitments are likely to change once you retire, so ensure you’re only paying the taxman exactly what you need to. Returning to the first point above, you’ll have plenty of time to investigate exactly what you should be paying in tax, so do some research and see what you can save.
4. Come up with a budget and stick to it – If you’ve budgeted during your working life, this shouldn’t change when you retire, and if you’ve not managed to budget before then it’s never too late to start. Knowing exactly what you have coming in and going out each month means you’ll also know precisely how much money you can spend on enjoying yourself without worry or guilt about doing so.