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Senior Finances

Financial Spring Cleaning After 50

Sprucing up your living space does not always have to be fun, but you can do it while adding new flourishes like plants, small paintings and more. As time passes, your finances are going to come front and center as you use retirement accounts rather than income to pay your expenses. Checking up on your current situation and making any changes you need doesn’t have to be a hassle. Here are some great ways to get a strong start on retirement planning.

Gather and Sort Documents by Financial, Medical, Etc.

Whether you’ve worked for decades or not, you are going to build up a number of accounts, from health insurance and/or medical care to 401(k)s, IRAs, banks and even credit cards. Keeping the information, or at least account numbers and PINs/passwords, is critical. You can’t clean up what you don’t know you have.

Retirement planning: calculator, pen and paper at hand.

Sketch Out Your Budget and Spending

Life happens. Specifically, bills can come up suddenly, like to repair an older car or high copayments for hospital stays. The goal of a monthly or annual budget isn’t just to make sure you can pay off monthly bills. You need to provide yourself a bit of a cushion for emergencies by ensuring you have the cash flow to do that. You may also want to talk to a financial advisor if you have assets that can help offset costs but are illiquid, like a house or car.

The other issue is inflation. Every year, your money decreases in value by about 4%. Are you accounting for that when you plan? If your annual budget is $25,000 this year, that’s going to jump to more than $30,000 in five years and $37,000 in 10 years. It’s important to keep that in mind for long-term planning.

Annuities Aren’t Just Free Gratuities

Annuities sound amazing. Guaranteed payments every month? You may even have heard about them at a free lunch seminar about managing finances in retirement. Financial services companies have a vested interest in a profit. So annuities have to make sense for them as well. They may provide a lump sum payment or a term of monthly payments. Make sure the math checks out based on your health and financial goals before diving in.

Relax and Enjoy the Weather

If you have set up your annual budget and set yourself up for success, you should reward yourself as well. Take a day trip to a nearby museum or musical. Set up a visit with your grandkids. Buy a new easy chair. Whichever way you go, it’s just as important to reward yourself for positive and proactive steps as it is to take the plunge and work them out in the first place.

Plan for your retirement one step at a time, with a little help.

Oh, and if you want, you can also think about how to make your living space even more personalized. You’ve probably already set aside some money for freshening up your space when you sketched out your budget.

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  • About John Curran:

    John has been blogging about getting the most out of life after 55 for eight years. As family members enter that stage, he has found more joy in helping them appreciate all of the opportunities they now have. When he's not writing, he's watching hockey or tinkering with his car.

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