Saving, investing and planning for a financially secure retirement can take up much of your time in life. Unfortunately, when you reach this stage, you need to continue this process to ensure you sustain your financial security. Andrew Corbman, a popular financial advisor from Ashburn and the owner of ASC Financial, Inc., says the financial goals of people who retire from their jobs are different from working professionals. Their objective is to preserve their present wealth, maximize the returns on their investments and to minimize their tax burden. He says the following tips can go a long way in helping these individuals to manage their money matter more effectively:
- Formulate a budget or revise your present one
He says most people are aware of the importance of formulate a budge to take care of their finances. However, your retirees this becomes even more critical as they do not have the avenues to earn additional incomes. Such a financial plan can help to keep track of your current expenses and identify areas where you are overspending. This goes a long way in ensuring that you stay out of financial trouble during your retirement years.
- Tax payments
The income you receive when you retire from your place of employment is chargeable to tax. You become liable as soon as you withdraw the amounts you are entitled to from your 401(K) plans. The only exception to this rule is if you opt for a Roth Individual Retirement Account (Roth IRA). Andrew Corbman explains that in such a situation, the withdrawals you make are exemption from tax.You also liable to tax on the returns you earn from the retirement investments schemes you presently hold.
- Delay taking your social security benefits
For most retirees availing their social security benefits at the age of 70 is not an option because they need the money. However, if you are in a position to wait till such time, you can earn more money and pay less tax.
- House maintenance expenses
Housing is a major expense most people have to incur during their lifetimes. Even, at this stage of your life, you are successful on paying off the mortgage on your home, you need to consider its maintenance and repairs. Over time, this upkeep expense begins to accumulate and it can create havoc on your budget. In such a situation, it may be more prudent on your part to sell your house and move to a comfortable retirement villa.
- Take advantage of discounts
One of the main advantages of advancing in age is that your spouse and you can avail various discounts that senior citizens are eligible to. These discounts can help you to save money. From transport services, movie theaters, eateries and museums, it is important for you to take advantage of such offers to lower your cost of living at this stage of your life.
Andrew Corbman says the above step can help retirees to stretch their incomes further in this stage of their lives. After all, retirement is a phase where you relax and enjoy life in until your twilight years. The last thing you want to do is burden it with financial difficulties.