After working hard for forty or fifty years, it’s time to put your feet up, and enter your golden years. Finally, you and your partner can spend some quality time together. You can take the trip you’ve always wanted, start a new hobby or just spend time with the younger family. Your golden years are for relaxing and enjoying life. The last thing you want is money worries hanging over your head. That’s why it’s so important to budget well in advance of those years.
For many elderly couples, most of their equity is in their property. When it comes to freeing up cash for your retirement, perhaps it’s time to think about downsizing. You can unlock some of that equity, and put it towards your retirement budget. Start looking for retirement property for sale, and use the prices to alter your budget. Choose an area that will help you enjoy those golden years. Why not live by the sea or take the opportunity to move closer to family?
Add up your investments and pension funds
If you’ve taken the right steps towards retirement, you should have a decent investment and pension pot. This is the best route towards setting yourself up financially, and it pays to start early. If you’re reading this before your retirement, start to think about putting money away in investments and 401(k) pension funds. When you get to the age when you’re thinking about retirement, take stock of your capital. Use this and the equity release of your house to set the main budget.
Start to cut down early
For many retired couples, they’ll have to adapt to a smaller budget in old age. The trick to making the change is by cutting down early. In the last five years of your working life, start to adapt to your retirement budget plan. Slowly cut down, and become more frugal. It will help make that big change less dramatic when it finally comes.
Pay off all your debts
You certainly don’t want a string of debt sullying your best years. The savviest couples go into retirement without any debt whatsoever. If you carry big debts with you, it will severely hold back your plans, and make budgeting difficult. Interest rates might change, making it harder to pay off the outstanding amount. As we said, you’re looking to enter retirement with minimal money worries. Debt will only hold you back.
Budget for the things you love in life
Last of all, don’t just budget for the bare bones of a life. Your golden years are all about spending time doing the things you love. If you’re passionate about travelling, set some money aside for a cruise or a few long trips. If you love to restore classic cars, give yourself some room in the budget to continue this hobby. Don’t strangle yourself with your finances.
Planning ahead is the very best option here. If you know the sort of life you want to lead in retirement, start planning the finances early!