Proper money management should be practiced by everybody, from young children to seniors living out their golden years. Money management is never more important than when you’re considering permanently exiting the working world. Joining the world of retirement is exciting but, as the years of relaxation and recreation approach, the need for committed money management becomes essential.


Assessing Finances Pre-Retirement

There are a lot of questions that must be considered before you jump onto the retirement ship. Retiring means cutting off traditional income and living on savings and investments. This is a huge risk — and one that must be considered in full detail before it is made.

  • How long do you expect to live? You need enough money to afford every year on retirement. If you retire at 65 and living until 95, then you must prepare beforehand.
  • How much money will you need? Ideally, you’ll want to have 80% of your retirement funds covered before you retire. This money can come from savings, investment accounts, retirement pension, veteran benefits, social security benefits, etc.
  • How large is your portfolio? Be realistic about your portfolio. Maintain a pragmatic and realistic approach and avoid last minute or poorly-researched investments.
  • How much have you been saving? Are you saving enough right now? Do you need to save more? Make sure to consider employer contributions as well. Every dollar counts when it comes to retirement!

This is a simple list of questions to ask for basic financial planning. We recommend performing more research and really digging into your financial situation. The more prepared you are, the more likely you will succeed with retirement.


Assessing Finances Post-Retirement

Once you reach retirement, certain things change and must be taken into consideration.

  • Social Security Benefits: First and foremost, retirement entitles you to Social Security payments. Now, realize upfront that you can start collecting Social Security before you even retire. However, we recommend waiting until retirement, because it’ll ensure your benefits are higher.
  • Pension/Savings Income: If you’ve been with a company for a long time, you’ll also likely get to take advantage of a padded pension. Couple this with savings money, retirement investments and Social Security benefits and the amount of money available to you just keeps increasing.
  • Taxes: Do not forget that even retired men and women must pay taxes to the federal government. We recommend everybody pursue a Roth IRA in their youth, because withdrawals from a Roth IRA face zero tax fees and expenses.

If you plan correctly and take advantage of all the potential income streams available, you should have no problem setting up a comfortable retirement plan. Just make sure you also employ the budget-living tactics mentioned below.


Budget Living

The important thing to realize is that you’ll still need to follow a strict budget when you retire, unless you happen to be well-off, of course. And even then, it would be wise to live frugally so that as much wealth remains as possible for your children and grandchildren. Also, it will drastically lower the chance of you ever running out of funds — something that you do not want occurring during retirement!

  • While Shopping: Avoid impulsive buying and only purchase things you genuinely need. Ideally, you should create a shopping list before you ever go to a store. Make sure to take advantage of sales and discounts.
  • While Eating: Plan your own meals and try to purchase groceries in bulk.  Enjoy fine dining as an occasional treat, but do not make it a daily habit.
  • While using Credit: Be extra careful with credit cards. Avoid them altogether if possible. Also, ensure that your credit card balance never exceeds 10% of your monthly allowance. At retirement age, you should be eradicating debt, not creating it!
  • While on The Phone: Utilize packaged deals from many companies bundle services and save money. Also, ask many questions and ensure that you fully understand the implications of the contract you sign. Make sure you also avoid unnecessary services!
  • While Clipping Coupons: Take advantage of every discount available, be it a senior citizen discount or a veteran’s discount. These can help you save bundles of money in the long run.
  • While Commuting: Get out of the car and put more effort toward walking and/or jogging to locations. You can also consider public transportation or senior transportation services. This will help you both financially and physically.
  • While Reading: If you really, really want to save money, consider bypassing Internet and newspaper services in favor of the library. Why pay so much for such services when you can access them for free?
  • While Staying Warm: Absolutely invest in a programmable thermostat. Energy prices are extraordinary high these days, so you need to conserve energy at any and all costs!
  • While Paying Bills: Use the Internet to pay for bills to avoid wasting money on envelopes, stamps, and checks.

These are rather cliché tips, but you would be surprised at the number of people who not follow them. Yet, following them can drastically reduce your expenses and tighten up your budget.


Handling Debt

Sadly, many seniors enter retirement with a heavy load of debt still hovering above them. The problem is that a slew of the debt-handling tricks available to younger folks (namely the notion of getting another job) are just not an option for some seniors. This is not to say that strategies do not exist! However, the strategies available to seniors are typically not the same strategies available to the rest of us.

  1. Utilize Reverse Mortgages- One thing you should not do is tap into your home. As a retiree, you should take your home with you and not be stuck making mortgage payments. In serious situations, a reverse mortgage allows the equity in your home to be transformed into cash. You don’t have to pay this money back, so long as you continue to reside within the home. You must be over the age of 62 and must have fully paid off your mortgage. Just keep in mind that doing this means taking your house out of your estate plans. The bank will get your house after your death and the lender will periodically inspect the home to ensure it remains in good condition
  2. Utilize Life Insurance- If you have a life insurance policy, you might be able to take advantage of a cash-surrender loan. You can take out up to a whopping 96% out of your life insurance and use it to pay off debts or deal with expenses. Just keep in mind that money you take out of it is money that does not go to your beneficiaries following your death.
  3. File Bankruptcy- Filing bankruptcy is not something anybody wants to innately do. However, it’s a worthwhile option for seniors who are struggling with enormous quantities of debt. Before you go with this option, we recommend you first speak with a credit-counseling entity of some type. The simple truth is that bankruptcy should be your very last option, though it can be very useful for wiping out huge quantities of credit card debts. Just realize that bankruptcy does not apply to all forms of debt!
  4. Ignore It- This is one option we do not recommend, though it has a few advantages. The worst a creditor can do is place a lien on your property, meaning the property itself will not be sold until after you pass. And in case you don’t possess a home, then the debt will simply be written off and will not be passed onto your children or grand-children. Like bankruptcy, this should also be used if no other options are available.



Managing your money never stops, no matter what age you are. The trick lies in learning to utilize your money in a way that is effective. You can start early by building up fruitful savings and investment accounts as well as a nice quantity of Social Security and pension benefits. Retirement should be a fun and relaxing period in your life, but it should also be a disciplined one based on the many tricks and tips you learned throughout your life. Successful retirement requires the ability to closely track and manage your money, lest you one day wind up with nothing in your pockets. Everything costs, including retirement!


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About the Author: Victoria K. Stickley is a copywriter, editor, and senior content manager based in the Dallas area. Her graduate education in counseling and research has helped immensely in her writing as well as the care she provides for her grandparents. She currently provides support and resources to senior care websites as she learns and experiences senior care first-hand.