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Retirement doesn’t mean your financial journey is over. In fact, it is just entering a new phase. As a retiree, you need to keep your expenses under control as you are probably living on a fixed income and want to avoid running out of savings. That’s why it’s more important than ever to be proactive with your money.
While it may seem counterintuitive to look to younger generations for advice, there are several financial strategies that retirees can learn from those still in the workforce. Take a look at these seven smart money habits that can help you protect your nest egg and enjoy the retirement you’ve worked so hard for.
1. Continue to invest
“By investing a portion of your portfolio in the market, you have the opportunity to hedge against inflation and get higher returns,” said Jordan Mangliman, owner of . Goldline Financial Services.
It’s tempting for retirees to rely on things that feel safe, like fixed income assets, pensions and Social Security, but you don’t want to miss out on potential returns. Continue investing to grow your funds.
2. Maintain an emergency fund
“Younger generations who are still working are more likely to have an emergency fund, but that doesn’t mean retirees shouldn’t do the same,” Mangliman said.
While retirees may want to rely solely on their pension or investment income, it’s important to remember that an emergency fund can provide relief when unexpected expenses arise.
“Although you may not be worried about job loss in retirement, you’re not immune to economic woes like the possibility of a recession, and if you need to withdraw money from retirement accounts it may be difficult to cover expenses like medical bills and car trouble,” said Mark Henry, founder and CEO of . alloy money management
3. Increase sources of income
“Think about how you can generate extra income, whether by working part-time, renting out a room or even using your skills as a consultant,” said Eric Severinghaus, founder and CEO of . bloomfilter. “It helps you financially and keeps you connected and engaged.”
Working people often look for multiple income sources, because they cannot rely on one salary. As a retiree, you may want to consider taking on extra work or picking up a part-time job to make sure you have enough money coming in.
You might want to try finding a profitable hobby so you have something to look forward to while also bringing in some extra cash.
4. Keep investing in yourself
“I find that employees never stop learning,” Severinghaus said. “Whether taking online courses or following trends, they know that knowledge is power. For retirees, that means you need to stay curious, too.”
Continue to invest in yourself – this could be by learning more about your finances, prioritizing your health, or just taking up a new hobby.
5. Stay informed about money management
“As you age, continue to educate yourself and stay up to date on how you can best manage your money, whether you do your own research or work with a financial advisor,” Henry said. “If you learned how to budget 30 or 40 years ago and never looked back, chances are there are things you can do better and improve, and there are absolutely techniques that can make managing your money easier and more efficient.
By managing money and staying informed about your investments, you can spend more time enjoying retirement and less time budgeting and paying bills. Its purpose is to understand what’s happening with your money so you don’t get stressed.
6. Use credit cards strategically
Henry points out that, when used properly, credit cards are a great way to earn rewards and build credit — or maintain good credit in your retirement years. Just because you’re not employed doesn’t mean you should be afraid of credit cards. You just have to use them responsibly.
Henry said, “If you use a credit card that offers rewards for things you already spend money on, like gas or groceries, you’ll save money. If you already had a rewards credit card while you were working, consider switching to one that better suits your needs and lifestyle in retirement.”
For example, if you start traveling more often to visit family, look for cards that offer miles to save money on flights and hotels. The main thing is not to spend money unnecessarily for rewards, but to increase daily purchases.
7. Analyze your budget regularly
You’ll want to stick to the same budget or spending plan as you did when you were working, because you can’t let your expenses get out of control.
Henry adds, “Be sure to include categories in your spending plan for things you want to do in retirement, whether it’s travel, experiences with family, or entertainment.”
Regularly take inventory of all recurring expenses, such as subscriptions or bills on autopay, and cross off anything you don’t use, just as you did when you worked.