Planning your finances for retirement is one thing, but managing your money the right way after retiring is a different ball game. Remember, after you hang your boots, you may not have a regular income source. And when you are old, it may also not be possible to accumulate money. You must manage whatever funds you have at hand and ensure that it lasts for as long as you live.
If you are looking for efficient ways to manage your finances after retirement, here are a few tips that will help you.
- Make a budget
Most people have the notion that the expenses reduce after retirement. While it may be true for some, it cannot be generalised. And while you may save on a few costs, other expenses may arise. So, you must make a monthly budget to manage the monthly expenses efficiently.
A well-planned budget will help you live within your means and allow your savings or the retirement corpus to last longer. It also could help have a financial focus – prioritise what is critical and cut out the rest.
- Focus of regular income
After your retirement, you may not have a regular income source like before. But with an effective retirement plan, you can have a steady income during your old age. You must park your retirement funds in appropriate investments so that you continue to get a regular income to meet your daily expenses.
Suppose you have received a considerable retirement payout in a lump sum. In that case, you can consider investing in avenues such as fixed deposits, mutual funds, senior citizen savings schemes, etc., so that your funds continue to grow and you get valuable returns from it. You can consider keeping a part of the retirement corpus liquid like in a savings account so that you can easily access it and withdraw during an emergency.
And while it is understandable that you would want to spend your golden years without doing any hard work, you can consider taking up a freelancing or part-time job to boost your income and keep the retirement corpus untouched for as long as possible.
- Get financial security with insurance
As you grow old, it is natural that the risk of health concerns increases. It is, therefore, advisable to be well equipped with a robust insurance cover to manage the healthcare expenses. You must invest in a comprehensive insurance plan that can take care of all your medical bills.
Make sure that you renew your medical insurance periodically, and it is a good idea to increase the sum assured by a certain percentage during every renewal. Generally, most insurance companies allow new entries up to 65 years for standard policies. If you have crossed the upper limit, you can consider investing in a senior citizen healthcare plan.
A robust insurance cover will help you meet the expenses without digging into your retirement corpus.
- Take advantage of the various tax benefits
When you retire, the last thing you would want is to lose a significant portion of your income in paying taxes. After retirement, you must plan your tax-saving. When you choose the investment options, it is better to select tax-saving schemes like NSC (National Savings Certificate), NPS (National Pension Scheme), SCSS (Senior Citizen Savings Scheme), etc. Avoid investing in schemes that have a more extended lock-in period and offer lower returns.
Final Word
Managing finances after retirement is not as challenging as it may be. All it takes is proper planning and prioritising your expenses and choosing the suitable schemes to invest in.
