Having your finances in order and being proactive about your financial wellness is one of the best ways to cultivate peace of mind during retirement, while disorganized finances can be a significant source of stress. 

In fact, a 2018 Harris poll indicated that money trouble is one of the leading sources of stress, with 44% of respondents saying that they’re stressed about finances.

While finances can be stressful when not managed properly, there are plenty of steps you can take to help ensure smooth sailing when it comes to your finances during retirement. 

We’ll cover what steps you should take, how they’ll affect your finances, and what else you should do to work towards a happy and fulfilling retirement.

1. Know where your money is going

If you don’t know where your money is going, it can be difficult to spot areas where you’re overspending. By tracking your spending, you can measure and analyze every purchase you make and ensure that you’re spending within your means.

Understanding your cash flow situation is key to feeling empowered and happy in retirement. It’s a good idea to get a sense of how much you spend monthly and how much money you’re bringing in. Once you have a budget in place and make a plan to stick to it, it will be easier to ensure that you’re only spending as much as you can afford.

2. Spend in line with your values

Are you spending your savings in a way that brings you fulfillment? Chances are, you’ll be more fulfilled if you spend your wealth in a way that aligns with your values in retirement. Spending in line with your values can even help to improve your physical and emotional health.

When coming up with a retirement plan, it’s a good idea to clarify what you value and see if your expenses align with those values. Some examples of values to prioritize in retirement could include your family, pursuing further education, traveling, or becoming more involved in your community.

By aligning your spending with your values, you can make sure that you’re spending money on the things that really matter. For example, if you value travel but live in a large home that eats up a lot of your monthly cash flow, you might want to consider downsizing to free up your budget for more frequent international travel. 

On the other hand, if you really value your community and your family, you might want to avoid spending money on “stuff” and instead, reallocate those funds toward creating lasting memories with family members or reinvesting in the community.

3. Have a plan for longevity

Do you know how long your retirement funds will last for? Retirees are consistently living longer, so it’s a good idea to plan for the long haul when it comes to retirement. One way to ensure that you’ll be able to draw on your savings for a more extended period while still meeting your retirement goals is to adopt a “bucketing” strategy.

Build a withdrawal plan based on your bucket strategy that allows you to accomplish some of your “bucket list” items early on in your retirement to feel both in control and fulfilled. This can be especially important if you’re concerned you won’t be able to travel internationally or complete other more intense goals as you age.

4. Create a strategy for health expenses

Medical expenses are an unfortunate reality as we age—nobody is exempt. It’s a good idea to consider long-term care insurance or create a savings strategy that earmarks funds for possible necessary care.

While saving for health expenses isn’t one of the more glamorous aspects of retirement planning, it can be just as vital when it comes to ensuring that your retirement is fulfilling and worry-free. By making sure that you have enough set aside to cover any future health expenses, you’ll be able to enjoy your retirement to the fullest.

5. Build an estate plan

An estate plan can help you know where your money is going, not just now but also in the future! You should work with an estate planning team in conjunction with your financial planner to create an estate plan that ensures you’re able to make an impact, leave a legacy, and care for your loved ones.

Aspects of an estate plan to consider include setting aside money for family and friends, giving money to charity, establishing trusts, and making sure that your will is up to date.

Work with a comprehensive retirement financial advisor

Whether you need help taking control of your finances in retirement or just need assistance fine-tuning your financial plan, we can provide the guidance you need to make sure that your retirement is the best it can be. Get in touch with us today to learn more!