Retirement is something we all look forward to – often dreaming of it wistfully as we work our way through the endless coffee-filled days of our careers.
All the while people pay into accounts like Roth IRAs, building up nest eggs that will allow them to leave the working world behind and relax in blissful serenity. This all sounds great, yet transitioning from an earner to a spender is a big deal and it can be quite stressful, especially if you want to avoid getting personal finance loans – there are a few things you need to do to make this process smooth and economical.
Adjust Your Portfolio
If you have put some of your savings into investments you may need to consider making an adjustment in the way you have divided your money. People interested in long term savings will benefit from equities and the stock market that are likely to grow over the long run – indeed, over the course of five years this type of investments can make you significant amounts of money.
Yet as you stop earning and begin living off these funds you will need to sell assets to take care of your daily needs – this type of liquidation is hard to do if you are invested in stocks as you may be forced to sell low. So if you are retiring soon it might be wise to move your money into bonds and cash which is less risky and can be cashed easily when you need them.
Liquidate Your Other Assets
A really good savings plan consists of more than just stocks and bonds, and if you are lucky you will have accrued real estate and other investments that will protect you from market fluctuation and economic turmoil.
Indeed, property is always a great investment, even considering recent troubles in the market. As you approach retirement it is worth thinking about selling them as, once again, you will need to turn your investments into cash which you can live off.
This doesn’t mean you should sell immediately, instead keep your eyes peeled for bubbles in the market which will allow you to sell high and make a big gain on your investment.
Remake Your Budget
Most families will have budgets that they use to manage their purchases and ensure that they are saving adequately. When you retire you will need to tear this up and come up with a whole new budget that accounts for any new activities and sets your expenditures at a tenable level.
Indeed, where you used to spend all day at work, you will now have the time to engage in leisure pursuits – this is fantastic but it is important to recognize that this is likely to cost you some money. You also need to ensure you spend your savings gradually – so set yourself an ironclad budget to ensure you don’t run out of money.
Retirement is meant to be an incredibly pleasant time of your life – the key to enjoying it is economic security that will allow you to live in a comfortable and care free manner. So be sure to go through these steps so you can take full advantage of your years of saving.