Retiring and Your Finances: Ways to Keep Your Cash Flow and Credit Going

Written by Georgina Taylor

Retirement is a great thing to look forward to: you’ll be able to spend more time doing what you love and you won’t have to worry about the daily responsibilities a life-long career requires. Once retired you will be in control of your time and free to be as active or relaxed as you choose. Yes, the best days are yet to come.

Unfortunately, many people are not financially prepared to live a life without having to work for a living. Without enough money coming in to pay the bills and still have some left over for you, you may find yourself in a downward spiral that affects your credit score, making it harder to find relief. Managing your finances on a fixed income is the most important thing you can do in retirement so you can enjoy the fruits of your labors. Here are some helpful hints.

Know Your Budget

Knowing exactly how much money you need every month to live is very important. This will help keep you from failing to pay loans, credit card debts or mortgages that you are responsible for.

First, figure out how much you will need for living expenses: house payments, food, insurance, gas and electric, phone, internet, any medicines you pay for – anything you cannot miss a payment on. Secondly, choose an amount to set aside each month for emergencies: you never know when you’ll need access to cash because of an accident or other unforeseeable event. One rule of thumb says you should set aside enough to cover all your expenses for six months. Finally, think about any short-term investments you want to make and set aside a little for those.

Everything left over is yours to do as you please.

Keep Your Credit Score Up

By paying your bills on time, you lessen the risk of your credit dropping in retirement. This can help you for future purchases, like finally buying that dream vacation home or helping your grandchildren through college.

Although you’ll be on a fixed income, make sure to pay off debts as soon as you can to avoid problems. Even though you are retired it is important to keep your score high. Should you need to improve your score, there is software to improve your credit score. The service provides you with credit reports from agencies, identity theft tools, as well as various reports, charts and graphs to assist you in your efforts.

Don’t let your credit score slip just because you retire: stay on top of everything and you’ll have plenty of great days ahead.

Look for Ways to Reduce Fees

Surcharges and fees for basic things like bank accounts and credit cards should be a big no-no during retirement. A few fees here and there can really add up if you are on a fixed income.

Look for ways to eliminate fees by using newer technology. Find a bank that offers free direct deposit so you can have all of your checks go into the account without a yearly fee. You can also choose online banking to move money around without penalties. If you use a credit card why not one gives you points toward future purchases? The more ways you can find to eliminate fees, the better your financial situation will be.

Consider a Reverse Mortgage

If you are over 62, you may qualify for a reverse mortgage, which will allow you to forgo your mortgage payments. This is a great way for older retirees to save some cash to use for other bills and purchases.

With a reverse mortgage you use the equity built up in your home to pay for your loan, so the more equity you have, the better. This can really take the burden of a large monthly payment off of your shoulders so you can enjoy your retirement. If you take a reverse mortgage, although you won’t have any payments you will still be responsible for property taxes and your homeowner’s insurance.

Open Direct Deposit

Chances are, once you retire you will be receiving money from several different sources. You may have a pension or 401K that you draw from each month or dividends from stock or social security. If you don’t learn to manage these sources quickly, you may find yourself with less money than you planned.

Having each of these sources deposited directly into your savings or checking account eliminates the need to keep track of everything. Funds instantly arrive in your account the moment they are disbursed, so you don’t have to worry about forgetting to deposit a check. This way, all of your money will be easily countable and retrievable, giving you one less thing to worry about so you can enjoy your retirement.

If you manage your money right, there’s no reason retirement can’t be a great time without financial worries!

Georgina Taylor works closely with those approaching retirement age to get their finances in order. She is a personal finance consultant for the over 50s and shares her knowledge around the web. 

Do It While You Can

No one knows how long they will remain physically or mentally able to enjoy what life has to offer. The reality of aging is things get harder rather than easier as the years pass. Activities we took for granted just a few decades ago may suddenly become too difficult to undertake. No one wants to spend their second act looking in the rear view mirror at what was. We want to look forward to what will be.

Glenn Frey of the Eagles said, “People don’t run out of dreams; people run out of time.” Think of all those plans you hope to embrace once you leave work behind to focus 100 percent on retirement. Free time is a blessing. Freedom to do what you want when you want is what retired life is all about. Once you arrive the trick is to not let the moments pass you by without making an impact, without grabbing for all you can.

My folks have been retired about 20 years. They have pretty much given up on long distance travel. Hassles of airports and security lines, rental cars and navigating unfamiliar surroundings is to the point they just don’t want to do it anymore. But before that they were traveling machines. They wandered Europe in a VW bug while my dad was stationed in Germany. They made regular car trips across the US in search of historic sites and memorable monuments. Mom and dad truly traveled, loved it, have collected many great memories, and are now content with staying closer to home. The point is they did it while they could.

A month ago my dad had a stroke. He is 85 and had been struggling a bit over the past year with his balance and a slight slur when he talks. The stroke was severe impacting his speech and leaving him paralyzed on his left side. After three weeks of intensive rehabilitation he is improving and we are moving him home. But once home, mom will require 24/7 help to assist with day to day living for how long yet to be determined. Dad is improving – we can understand what he says and he is getting stronger. But how far will he recover? No one knows.

You don’t always have to wait for retirement. I know it’s hard to set aside time when living an incredibly busy life but how rewarding it can be to explore your passions before you retire. Younger with more stamina and no sore knees you can truly enjoy the moments to their maximum. Your eyesight is as good as it will ever be. You may feel a bit tired at days end but you have the will to press on – mind over matter is still possible. Although you cannot do all those things you hope before your second act delaying everything is a risk. You never know where you will be or in what shape in 10 or more years.

Most of my family is big believers in walking, hiking and generally getting out into nature. My wife and I deliberately chose a retirement area with an abundance of state and national parks packed with enough winding trails and hidden vistas to keep us busy for years. My favorite aunt at age 75 traipses around the world on tours and trips that inevitable involve navigating many miles on foot each day. And don’t get me started about my Swiss family. They can walk me into the ground while easily hiking seemingly vertical paths leading to hidden lakes and secluded restaurants only accessible on foot (or helicopter). We are generally in the same age group and love hitting the trail. And we realize we may not be so fortunate to be as mobile as my aunt when we reach her age so we do it now while we still can.

Having reached retirement age or thereabouts most of us realize we are not in control of as much as we would like to be. So much is beyond our sway if we hope to make good on our second act we must remain opportunistic. Don’t let possible good times pass us by. Stop thinking about it and instead do it. Get going while the going is good. I know I cannot change the past. And I don’t know exactly what the future has in store. But I am here today, now, in this moment. It is up to me to make the most of this moment while I am still ready and willing and able.

LoveBeingRetired.com