Print Posted on 02/07/2017 in Financial Planning

Financial Planning For Retirees

Financial Planning For Retirees

Financial planning for retirees shouldn’t stop once they stop working. Because having a financial plan only becomes more important at this life stage. Without a steady paycheck from a job to work with, knowing exactly how you’re going to have cash for upcoming expenses, pay for the lifestyle you want, and ensure your money lasts you through retirement has to be prioritized like never before. And one of the main reasons you worked all those years towards retirement is so you can enjoy these years. It’s hard to feel at ease if you’re money and future is not in order, right? That’s why retirees will be less stressed and have a better retirement when they have a strategic plan for their finances.

Establish A Financial Plan

As a retired individual or couple, it’s crucial that you have a solid financial plan for your income, expenses and lifestyle, and the unexpected.


There needs to be some kind of money coming in during retirement. Whether it comes from Social Security, a pension, or if you’ve saved or invested money in retirement accounts, now’s the time to consider where your monthly income is going to come from and how much is it. If you do have money in retirement investment accounts, spend time understanding withdrawal rules and how to avoid penalties from early withdrawals. You don’t want to pay a 10% penalty because of a dumb mistake.

View this table or meet with a financial planner to get directions on how to avoid that. And continue or start generating extra income with through investments. It’s wise to put money in investments that both produce an immediate return and a long-term return. Some investments to consider include CDs, bonds, treasury bills, stocks, REITs, and life insurance. If you’re not familiar with these, a financial planner can also help you with increasing your income through retirement. Now, calculate how many years you can safely live off of your income and savings. In other words, know how long your money will last. If you don’t know this, you could risk not knowing you need to make financial adjustments until it’s too late.

Expenses And Lifestyle

Besides planning your income, you also need to plan for your expenses during retirement. These are some of the costs you have to deal with when you’re retired: housing, utilities, food, clothing, insurance, transportation, personal care, and any debts if you have them. These expenses didn’t even include your fun expenses.

Since you now have all this extra free time, there are many lifestyle choices (and expenses) available once you’re retired. For example, do you plan on traveling extensively or little? If you plan to travel, where are you going to, for how long, and how many times a year? Do you want to move entirely to a different location? Maybe one that is closer to your family or a warm coast. Another option is to downsize your home to gain some more savings, or continue living in the same place. And what hobbies are you going to pursue? Will you join a golf club, pick up painting, or get season tickets to your favorite sports team? Answering all of these questions and knowing the cost of these lifestyle choices will help you plan down the road.

With this information in hand, you’ll know what you can afford and what areas you need to possibly compromise on to make sure your savings can last. For example, maybe based on your income or total assets, you have to decide between joining a golf club or your beach house in Florida. You’ll have the information to make the right decisions about what lifestyle you can afford when you have a financial plan about how much your expenses total each month.

The Unexpected

What happens if you burn through your savings quicker than you expected or live longer than you expected? Are you prepared if your investments drop by 15% in value? Or you go through an expensive medical procedure that insurance doesn’t cover? Can you afford professional care or stay at your children’s place if push comes to shove? Consider all of these situations, and more, to determine if you would you be fine or could something present a financial nightmare you’re totally unprepared for.

Smart retirees have backup plans to address these potential emergencies if they were to come up. Some solutions include working again, downsizing into a smaller place, or selling material items that are no longer as important to them. Spend some time thinking of creative ways to generate more money if worst comes to worst, and you’ll be better off if it ever happens. For those in an excellent financial position, you don’t need to pay as much attention to this area. But it never hurts to have an emergency plan, at least for the sake of peace of mind.

Need A Financial Planner?

Now you have a good idea of the three main financial areas to look out for during your retirement. You need to plan for your income, expenses and lifestyle, and the unexpected. That seems simple enough on the outside. However, if you’re not up for this task or it sounds like too much work, consider hiring a local financial planner through our homepage directory. A financial planner can evaluate your current financial position, establish a monthly budget for expenses, and help you support the rest of your golden years. Essentially they make your life easier by doing the work and allow you to focus on enjoying your retirement. And a professional can advise you on the best course of action to take when it comes to your will, trust, estate, and other assets for after your death. While you can set up a financial plan on your own and prepare for disbursing your assets after death, sometimes it’s best off to leave these decisions in the hands of a professional so they’re done right. Whether you do it on your own or a professional does, it’s wise to have a rock solid financial plan. Then you can better relax and enjoy retirement like you deserve! Related: Financial Planning For Married Couples