Resources for Managing Funds During Retirement

Every adult has concerns about whether they will have enough money to remain comfortable and safe throughout their retirement years. We all know that the best way to ensure you have plenty of funds available is to start saving when you’re young. However, whatever your age, there are steps you can take to plan ahead for your senior living years.

Nonetheless, whether you are well-heeled or not so much by the time you do retire, managing your money from that point on requires careful thought.

Once you actually retire, things change.

Your circumstances are now different because you’re transitioning from earning to spending. That can actually make things more complicated, depending on your assets.

“Prioritize your passions,” advises J.P. Morgan Wealth Management. “Reflect on your interests and dreams to create a retirement bucket list aligned with your passions and values.” Then, assess your financial resources and budget wisely. Passions keep you lively, but necessities are the first priority.

Income

Your retirement income might include:

• Fixed, automatic pension and/or Social Security benefits
• IRA or other retirement accounts
• Other savings
• Investments

Having multiple income sources provides greater financial security. But if you have assets beyond a pension or Social Security benefits, you will want to stretch those funds. It may be tempting to splurge on something you’ve always wanted or take the trip of a lifetime, but consider the long-term effects on your nest egg.

Expenses

Essential costs:

• Housing (rent/mortgage)
• Utilities and maintenance
• Property taxes
• Insurance (home and auto)
• Auto maintenance

Moving to a senior living community such as Magnolia Manor makes it easier to budget because fundamental costs are pulled together into a single, predictable monthly payment. That typically includes living space, meals, utilities, maintenance, and security. Moving to senior living can also eliminate expenses for auto, property taxes, and insurance.

Keep in mind that the average 65-year-old can expect to spend $165,000 on healthcare expenses in retirement.

If needed, trim discretionary spending to stay within budget. Go through the past year’s credit card and bank statements to find automatic payments you’re making for things you don’t really need, such as multiple streaming services. Add up how much you’re spending on dining out or other entertainment, groceries, trips, and so on.

Helpful Resources for Managing Funds (or Perhaps Boosting Your Nest Egg)

Ultimately, financial decisions are up to you, but making those decisions can feel overwhelming. As with many important milestones in life, it helps to get additional perspectives.

Informal Support

Family, friends, your pastor, or other trusted individuals can help you think things through and perhaps share their own experiences.

Professional Support

A trusted banker, financial advisor, or estate lawyer can explain the technicalities of various retirement funding sources and help you make a plan to manage your finances as you move through retirement. For example:

• Pension plans, Social Security, IRAs, and other types of retirement funds all have rules that define when you can start drawing money without paying a penalty and how much you will get. (For example, your Social Security benefit will be considerably higher if you wait till age 70 to start collecting benefits.)
• Financial markets fluctuate. AARP notes that “[during] the first few years of retirement, big losses can jeopardize your financial security much more than a downturn later on.”
• Portfolio goals shift. Most seniors re-focus on retaining sound but less risky assets rather than rapid growth.
• Sensible withdrawal rates. You can augment pension or Social Security payments with periodic withdrawals from investment accounts. But you want to protect the principal. Taking out less now leaves more for later and allows you to continue earning as much interest as possible.
• Pre-retirement planning may allow you to create additional income streams for retirement such as Treasury Inflation-Protected Securities (TIPS) or a low-cost income annuity.

Online Resources

• Investopedia is a well-respected, unbiased resource that explains all sorts of financial issues in plain language. You can order their free Retirement Guide to learn more about receiving assistance in building the best plan for your retirement.
• The National Council on Aging also offers an array of information and tools to help seniors create a budget, avoid scams and fraud, find ways to reduce debt and stretch their retirement dollars.

Many of today’s seniors are taking matters into their own hands, finding ways to increase retirement income by not exactly retiring. Part-time work, in person or online, can bring in extra money and also keep you active and engaged with others. Be aware, though, that continuing to work may also affect your Social Security benefits and/or income taxes depending on your age and earnings. And where you live.

Save on Senior Living Costs at Magnolia Manor!

Stretch your retirement dollars further at Magnolia Manor. As a nonprofit senior living community, we are dedicated to providing quality care at an affordable price. Schedule a tour today or give us a call at (855) 540-LIFE to discover how wonderful and affordable senior living can be!