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Financial Planning after Retirement

By Charles Hopkins Published 08/8/2006 | Social Issues

Just imagine so many things you can do when you get freedom from the grinding pressure of a 9 to 6 job! The hobby that you could never pursue, the tour you could not take up, the books you could not finish and the list seems to be pretty long. Your retirement years can really prove to be golden years if you are allowed to enjoy this freedom without any tension whatsoever. And do you know how it is possible? It is possible only when you have enough funds at your disposal. The secret behind enjoying financial freedom in your retirement days is continuing with some form of saving even if you no longer earn money. What do you think? Impossible? Just try our tips and who can say you may find out the proverbial gold watch in no time!   

You might have doubt as to why you need to keep on saving in these years while you have saved money all through your working life. Let me explain why you need planned management of money when you stop to earn.  Suppose you have retired in your early 60s and so that your health is in perfect state, there is no reason why you should not live on for another twenty to twenty five years or more. Now during these years the amount of your retirement asset remains same, but due to inflation its effective value diminishes over time. In addition to periodical monitoring of the financial situation, you have to keep continuous watch on some key areas of finance and rest assured you will enjoy the freedom during your golden days in the same way as you always fantasized.

A meticulous planning, a reasonable budget and saving are what that can help you make best out of your retirement days.

First of all assess all sources that money will be coming from during the retirement days. It may be investments and other kinds of savings, it may be the pension schemes or it may be social security. At the very beginning of your retirement days determine what percentage you will keep back for saving. In this stage your motto will be to avail the vehicles that provide tax benefits and take the help of a financial consultant to know about the 401(k) plans in details. So far as investment is concerned, be a little cautious at this stage. Generally it is recommended that you should allocate your lifetime saving in this way: Keep aside a parentage of your saving in cash or liquid CDs, a portion in bonds that makes a mid-term payoff and make a long term investment in stocks with the rest of your saving.

A financial management does not mean that you will deprive yourself all the joys of life like a miser. Just assess your retirement goals and you can fulfill these dreams by drawing out 4% per year from your retirement savings accounts like IRAs and 401(k)s.

There are also ways to curb on the unnecessary expenditures if you become little careful. As for instance what about the banks that charge exorbitant service fees? Just shop around and you will be definitely find out banks that offer same services for less and some services even free.

As a senior citizen, you are entitled to get discounts in number of sectors. Make a research and never forget to avail the facility of these discounts.

Consider investing in long term care insurance. It will prove to be a good decision if god forbids you need in your ripe years the nursing home care. Start early and you can get the benefit of a lower rate of premium.

Last of all, beware of the fraudulent investment schemes. If something sounds to be too good to believe, then do not believe it.