Even though I have been retired for 17 years, hubby kept on working. So, I wasn’t really retired in the sense because somebody in our duo was still bringing in money. I never had to fret about money or cash flow because basically we had money and cash flow constantly streaming in!
Fast forward to today and the eventual has now happened. Hubby has now officially retired; he’s no longer working; he’s no longer bringing in a good-sized salary. Now, I’m officially retired myself along with hubby. This is the point in our lives that we have been planning for. We now have to rely on different income streams of money. We have to learn to live within our new means. We have to comprehend that if we make a money mistake we may not have the fortitude to correct it anytime soon. We have to face the fact that if we don’t handle this real retirement correctly, we could effectively run out of money in our old age!
Wake up call!
Technically, we’re starting over and anew. “Retirement is a milestone and a good opportunity to start fresh,” says Ralph Poirier, vice president of cash management at Fidelity Investments. The clean-slate approach, he says, has the potential to make dealing with finances easier, more efficient, and cheaper if you can consolidate accounts and mitigate fees.
Right from our new retirement beginning, DH and I have decided and agreed that we are going to forget and forgive ourselves from our past financial indiscretions. This is a new day. This is a new life. I think we have garnered enough financial experience to know what to do and what not to do.
Naturally, of course, I’ve been reading and pounding the pavement and learning how to live within our new financial guidelines. One of the best (so far) articles I have read concerning proper cash flow management in retirement comes from Fidelity Investments (of course) click here.
To start, consider the ways that retirement can change cash flow. Your weekly or biweekly paycheck may be replaced by income from a variety of sources, including Social Security benefits, pension distributions, and annuity payments. Some retirees may even generate income from part-time employment or sales of assets.
Spending patterns will also likely change, reflecting both your new lifestyle and shifting financial responsibilities. When you retire, often nothing is being withheld for state and federal income taxes, so you may be responsible for any quarterly estimated taxes. Likewise, most retirees generally have to pay health care and other insurance premiums directly to the insurance carrier(s). Some retirees may also find they are traveling more or living in dual residences. All these situations can make monthly bill paying even more complicated.
DH and I just sold a valuable asset (vacation home). It was a challenge to figure out what we were going to do with the money and how we are going to make it last. In the ‘before retirement’ days we would have gone out and spent a good chuck of it. We would have taken a very expensive vacation (Italy or Europe), we would have bought ourselves another brand new car (paying cash) and I would have given both my daughters a little cash ‘gift’. No more. Those days are now long gone. No extravagant vacations for us. No more newish cars. The one we are driving now will be driven in to the ground before it will be replaced. We’re done with flipping homes and buying vacation properties. Instead, DH and I jointly sat down at our kitchen table, discussed and planned how our money is going to last us for the next thirty or so years. What do we want, what do we want to accomplish, where do we want to go, how we are going to get there and how we are going to keep our costs low so that we can meet our expenditures till the end of our lives.
The last check we write will be to our undertaker (we want to be cremated) and hopefully, if all goes well, that check will bounce.
Live well and prosper, my friend. Live well and prosper.