Senior Spending: Top Tips For Managing Money In Retirement

The Australian Dream might look a little different in modern times, but retiring comfortably is something that every Australian works diligently towards, and all of us have a right to do so as well. Saving for your retirement is a process that you want to start early. It’s also well worth maintaining a good sense of what you are actually working towards, which is easier said than done, especially if you are at the beginning of your career or just entering the workforce. If you are starting to review your retirement plan now, however, and want to know how you can manage your money better in this period of your life, we have you covered! Let’s discuss what you need to consider as you come closer to retirement.

Understand your options
One can’t plan to manage their money a certain way in retirement without actually understanding what that retirement looks like. Are you anticipating you will join an assisted living village, are you interested in community care, or will you be moving to the suburb your children live in? Getting clear on your living arrangements is going to inform your budget, so be sure to have these conversations with your partner, friends and family so you can explore all the possible options available to you. You don’t want to find out that your partner has entirely different plans or preferences from you and have to choose between one or the other further down the line.

Super, savings and senior pension
Australia has a relatively generous senior pension compared to other countries, but this is not the only income stream you will likely have during your retirement. Superannuation and savings can also contribute to your retirement expenses, but everyone is going to have a different representation in each of these retirement income streams. When you know how much there is in each pot, you can more accurately predict what will be spent each year and how much you can allocate to things like travel and even property ownership. Don’t be afraid to ask questions and make the calls to find out exactly what you are entitled to, as these are the privileges you have earned over the course of a life of hard work.

Work with a financial advisor
Seeing a financial advisor is a great step to take at any stage of your life, however consulting these professionals can be especially useful when retiring. A great financial advisor will be able to plan out your finances and educate you about where your money might be better placed to earn interest or dividends. It goes without saying that we can all be very emotional or experience concerns when making life decisions that involve a significant amount of money, and so it is invaluable to work with someone who can make an assessment and recommendation based on the facts presented to them as well as on your best interests.

Just make sure you know what you want from your retirement well before you meet with your advisor, as you don’t want to end up with a plan that doesn’t align with your values and goals.

Pay in full where possible
The last thing you want to do when you retire is to incur more debt. As such, you should be looking to pay for things in full so that you don’t have money coming out of your accounts at regular intervals and impacting the clear plan you have for yourself. Debt and payments are fine to pursue when you are earning an income and can pay them down with money coming in the door, but as you retire and wind down from revenue generation – you want to avoid taking on any financial burdens. This may look like buying a car outright rather than leasing, buying a modest apartment rather than renting, or even paying off smaller ticket things like phone plans.

Retirement is also referred to as one’s golden years for a reason. This is the time when you can really relax and enjoy the fruits of your labour. Getting yourself in a good position and learning to manage your money now will ensure that you continue to enjoy those years and have the financial freedom to explore all the passions and pursuits you may have had to place on the backburner over the course of your career and when raising your family.