How to manage your savings once retired?

How to manage your savings once retired?

It is very frequent and if it is not so, it should be, that during our active phase we dedicate ourselves with some intensity to planning our retirement. Saving and having private savings to complement our public pension is the best way to guarantee a quiet retirement and in line with our wishes and needs.

Main changes:

From the side of the income: These are reduced compared to the last salary of our active stage in a percentage that is known as substitution rate. From the side of expenses: The normal thing is that after retirement, the structure of expenses is altered, although it does not have to be reduced with respect to the active stage since what can happen in many cases is that some are replaced by others. For example, get a Medicare Supplement Plans in 2019 here there may be a reduction in travel expenses, those derived from meals away from home or from work clothes, but at the same time, there are previously nonexistent expenses, such as those associated with a new hobby or hobby to occupy the free time.

How to manage the savings?

1. In the first place, it is very important to preserve the savings. Once retired, it is not convenient to maintain a speculative saving profile, since we do not have a broad time horizon nor do we have high rents to recover from a bad investment decision. Therefore, it is essential to select our vehicles to channel these savings, always with a conservative approach.

2. Planning: At this stage, it is not usual to address large financial objectives such as the acquisition of a home or, of course, the start-up of a business. But it may be necessary to address other issues such as helping a child carry out a project or addressing health care expenses. In this sense, planning is important and is based on determining the objective and time, analyzing the resources we have and establishing how we are going to address that expense, being the most reasonable, if the situation allows it, to set aside little income a little.

3. The increase in life expectancy means that you have to live longer as a retiree. Therefore, the savings should last longer. It is important when planning the stage as retirees to estimate our income and expenses. It would be advisable to assess whether there are superfluous expenses that we should reduce or eliminate

4. Monitor inflation: Inflation is a silent enemy since it makes our money worthless. The objective of covering inflation is not a priori an aggressive investment objective, and it is relatively easy to achieve in moderate inflation environments.