For millions of individuals, the day they retire is filled with joy, sadness and uncertainty.
After all, you've been going to work for 30 years and have known where and when your next paycheck is coming. But now that you're retired you may not be sure about the next steps you should take, especially if you know you have to make a big purchase.
Below are a few things to keep in mind when you plan for retirement and to help make that big purchase ahead more manageable.
Assess Your Financial State
One of the first things we recommend should actually occur before you even retire. That is to analyze your current 401(k) portfolio and taking a good look at your savings. Do you feel that both accounts are in a good place?
If so, the satisfaction of knowing you have done an excellent job of planning for retirement will help relieve any stress you might have before retiring. However, if you're feeling uncertain about where you have invested your money or the amount you have saved up, then perhaps you might want to talk to a financial advisor.
Create A List Of Big Expenses
Creating a list of some of the big purchase items you need or want to make in retirement can help plan for them. By writing them down, you can get a sense of the things you need to buy versus the items you would like to purchase.
Once you have your list, share it with your spouse, family members, friends, or other retirees. Find out if they had to make similar big purchases, and what they did to plan and save for the big expense. From this list, you should also be able to understand which living expenses are no longer deemed necessary and can be cut out in your retirement.
It's essential to be flexible with your money in retirement. If you know you need to remodel your kitchen, then you need to be flexible enough to reallocate some of the funds you had saved for a big trip and use them towards your remodeling project instead. Random and sudden expenses are going to pop up in retirement, and without that safety net of a regular paycheck, you need to be able to make adjustments and decide which costs you can cut back on as needed.
A financial advisor can also help you plan for these sudden expenses, and help decide where you should invest your money in to get the safest returns.
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