Many newly retired people fall into one of two groups. The first group hoards their money, spending as little of it as possible because they want to make sure the money lasts a long time. The second lives like they’re still getting a weekly paycheck and are shocked to discover that money runs out far more quickly than they had ever realized. The sweet spot is somewhere in the middle and getting there means knowing how to handle what income you might still receive as well as how to grow your money over time. Here are some of the easiest financial hacks for those of you who are retired and still figuring out how to manage your money.
If you aren’t already receiving it, eventually you will be eligible for social security program benefits. Hopefully, you were able to meet with a retirement advisor before you left the workforce who was able to explain social security’s intricacies to you. If not, don’t worry! There are plenty of great guides and services out there for people who need to learn how to navigate the system accordingly. Take advantage of them!
Social security is great because it provides you with a steady income. The payments might not be as much as you made when you were working full time, but knowing that you have something coming in each month can help you breathe a little easier when you’re planning your budget. Make sure that you enroll! After all, you paid money into the system your entire working life! Time to reap some of the benefits!
Growing Your Money
The key to financial success, no matter which life stage you are currently in, is to use your current money to make more money. Investing often feels like a gamble to the uninitiated who assume every investment is as volatile as the stock market. The reality is far more complex. There are some good and steady investments out there. Real estate is usually a good investment because of how fast its value appreciates. The Motley Fool website has a great how-to for people who are new to investing that you should check out.
Note: It is rarely a good idea to invest independently, especially if math and economics aren’t your strong subjects. Working with a financial or investment advisor is always a better idea for the investing newbie.
Now that you’re retired the last thing you probably want to do is put yourself back to work full time, even if you’re working for yourself. Even so, having a few trusted avenues of income can help put your mind at ease if an unexpected expense pops up. Moreover, thanks to the internet and the explosion of the gig economy, earning a little extra pocket change here and there is easier than it has ever been.
Driving for companies like Lyft or as a delivery person for Amazon, Postmates, etc is a fantastic way to stay active and bring in some money on the side. Another path that many retired people take is learning how to monetize their hobbies and know how. Some tutor students via live stream. Others sell the crafts they make. You can earn enough through these methods to give yourself a cushion without putting any retirement income (or your status as a retired person) at risk.
Remember to go slowly. Take a few months to find your footing as a retired person. Your money situation is going to shift and fluctuate a lot during this initial transition. But if you are patient and work with the pros, you should come out ahead!