Retirement income functions very differently from income during your working years. During your working years, you probably had a single employer and a single income source. As a retiree, you will most likely receive income from multiple sources, including pensions, one or more individual retirement saving accounts, an investment, etc.
While working, you receive your salary on a recurring basis such as weekly, bi-weekly or monthly. As a retired person, you might receive income only monthly, quarterly, annually, and even sporadically depending on the type of investments you have made during your working years.
These income streams you have made available for yourself during your work years are very important but managing the income is one thing you should also take note of so you do not just squander your hard-earned money.
There are various ways through which you can manage the income you get during your retirement.
- Have a plan: Now, you are probably asking why you should have a plan when you are nearing the age when you might not be able to do the things you’d normally do when you were young. You may have several financial goals you wish to achieve but to achieve them at the right point, you need to have a financial plan in place. When it comes to money, planning needs to be concrete as there are enough variables that can affect your financial planning. For example as the body ages, more attention is needed to be paid to it especially health wise. One of the best ways you can help yourself is having a health plan and preparing for any health emergency so as not to push the burden of your health on your kids or family members.
- Make a budget: After planning, it is important to know how to make a budget for the things you have planned for. The key to a successful budget is realistically anticipating your income and your expenses which means accounting for every naira. In addition to the expected, try to estimate as closely as possible the expenses that are irregular or miscellaneous but can leave you in a financial plight, such as home repairs or improvements, health care costs, vacations, car repairs, etc.
- Spend Judiciously: One of the many problems retirees face is spending. Once retired, they become lackadaisical with spending and begin to spend on unnecessary things especially things they were probably unable to spend on when there was so many bills to cover. As a retiree, it is not out of place to want to do some things your work years did not allow you to do or to want to enjoy some things your work years made you miss out on. It is also very important to remember there will always be bills to pay and expenses to cover so whenever you are spending money as a retiree, always put in mind that unexpected expenses will rise and if they rise, will you be able to cover them?
- Don’t stop saving and investing: Savings and investment shouldn’t stop because you are retired and you feel it’s time to “chop life”. As a retiree, you should try as much as possible to continue saving and investing because retirement doesn’t mean you won’t have bills to pay anymore. Bills, expenses, etc. will always be there and if there is no money to sort these out, it throws one into a position they would not be pleased they are in.
In conclusion, remember that income made during your retirement should be duly managed and wisely spent because na who get money, na im dey chop life.