If you’ve planned wisely, you’ve built up a good nest egg so you can enjoy your golden years in comfort. But even after you kick back and start taking it easy, you’ll need to practice good retirement funds management to make sure you have enough money to last.
1. Consider Taxes When Making Withdrawals
Always be sure to remember taxation laws when making withdrawals from your retirement account or investments. You have to start withdrawing from your retirement account at age seventy and a half no matter what, but different retirement accounts may have different taxation limits or rules.
It might even be wise to hire a retirement financial advisor, as they can help you come up with good tax strategies and tell you how much money you can safely withdraw while retaining most of your investments in your accounts.
2. Turn Retirement Assets into Passive Income
It’s also a good idea to take any retirement assets you have and try to make them generate passive income for you. For instance, you can take some of your retirement funds and invest those funds into real estate.
If you rent out the real estate to tenants, you could give yourself a good chunk of passive income every month for the rest of your life. By guaranteeing yourself some retirement income in this way, you’ll never have to worry about money again and you’ll be able to provide a good inheritance for your family. Once more, a financial advisor can help you determine the best way to invest your retirement funds for maximum success.
3. Prioritize What’s Important
Perhaps more important than anything else, you must prioritize what truly matters in your life when spending your retirement funds. Don’t waste your retirement cash on things that don’t matter or things that don’t bring you joy.
By the time you retire, you should know what you like and what you want to spend your time doing. Spend your money on those things and you’ll be much happier in retirement.
4. Pay Off Debts Fast
If you have any debts left by the time you retire, try to pay them off fast. You can use a debt snowball calculator to prioritize your smaller debts and pay those off to prevent their interest from accruing, then progressively move on to larger and larger debts.
When you are debt-free, you’ll be able to use the rest of your retirement income as you please. Plus, getting rid of all your debts means that some of your retirement income won’t have to be funneled toward interest or minimum payments for decades after you retire.
5. Delay Social Security if Possible
Lastly, try to delay dipping into Social Security for as long as you can. If you wait until 67 or later instead of withdrawing at age 62, you might end up benefiting from tens of thousands of dollars more. Because Social Security guarantees you a monthly income for the rest of your life, waiting to start dipping into this pool will let you enjoy a much higher standard of living in your golden years.
Main Photo by olia danilevich.
