Thinking About Retirement? The Basics of Financial Literacy Are Your North Star

Thinking About Retirement? The Basics of Financial Literacy Are Your North Star SouthPark Capital

Working towards retirement, you may have a detailed plan on how to manage your finances so that you have enough saved by the time you leave the workforce. With no external income coming in, there will be a new rulebook on how to manage your retirement earnings, expenses, and investments – not just so that you can keep growing your portfolio – but so you can live comfortably. Financial literacy in retirement is therefore crucial to achieving the retirement you dream of and can be understood through the following basics.

Earning

In retirement, you start to pay yourself with money you earned and have invested throughout your career. This money may come from employer-sponsored retirement accounts, individual retirement accounts, and Social Security. It’s essential to understand your sources of income, how much is in them, how much you’ll be getting from them, and the best times to access each. For example, you are eligible for Social Security from age 62, but experts suggest waiting until age 70 as benefits will be higher due to delayed monthly credits.[1]

The trick is that how much you choose to earn is up to you, but it is recommended that you shoot to earn 80% of your previous income[2] by utilizing multiple income sources. You should also look out for how this new income is taxed and how your sources of income are affected by unforeseen taxes in retirement. Overall, the timeline for when to utilize the different sources of income you have will require a comprehensive plan based on your financial situation, assets, and goals.

Spending

Believe it or not, spending wisely is the key to retirement longevity. Your spending is dependent on your lifestyle relative to your earnings. If you opt for a similar lifestyle to that of your workforce days, you can predict how much you’ll be spending in your day-to-day life. However, in retirement, there may be new additions like hobbies and habits that should be financed, big purchases like homes and cars, and major financial decisions like relocating or traveling regularly.

You may also have home mortgages and car loans to pay off or an obligation to financially support your kids’ and grandkids’ education. All these costs need to be factored in when thinking about spending. Then, the most under-planned costs in retirement are healthcare and long-term care. You can only receive Medicare from age 65, and that will not include long-term care. In addition, Part B, which covers your regular doctor visits, for example, is not free! Therefore, when thinking about expenses in retirement, it’s beneficial to prioritize your health and long-term care as early as possible.

Understanding earning and spending in retirement are the first steps to financial literacy, empowering you to take control of your future. To further gain insight into your finances in retirement, [sc name=”comp_review”] to sign up for a complimentary review with us at [sc name=”company_name”].

 

[1] https://www.ssa.gov/benefits/retirement/planner/applying2.html
[2] https://www.bankrate.com/retirement/how-to-manage-money-in-retirement/


Securities offered through Arkadios Capital, LLC (Member FINRA and SIPC).

Past performance does not guarantee or is indicative of future results.  This summary of statistics, price, and quotes has been obtained from sources believed to be reliable but is not necessarily complete and cannot be guaranteed.  All securities may lose value, may not be insured by any federal agency and are subject to availability and price changes.  Market risk is a consideration if sold prior to maturity.  Information and opinions herein are for general informational use only and subject to change without notice.

This material does not constitute an offer to sell, solicitation of an offer to buy, recommendation to buy, or representation as the suitability or appropriateness of any security, financial product or instrument, unless explicitly stated as such.  This information should not be construed as legal, regulatory, tax, personalized investment, or accounting advice.   This message (and any attached materials) is for the sole use of the intended recipient(s) and may contain information that is privileged, confidential and exempt from disclosure under applicable law. Any review, dissemination, distribution or duplication of this communication is strictly prohibited. If you are not the intended recipient, please contact the sender immediately by reply e-mail and destroy all copies of the original message.

Share This Post:

MORE ARTICLES

Join Our Mailing List

Join our mailing list for exclusive financial insights, updates, and offers tailored to your needs. Stay informed and take control of your financial future today!

WELCOME TO OUR NEW SITE

We've Made Some Big Changes

We're delighted to introduce our new and improved online space tailored to elevate your online experience.

If you have any thoughts, questions, or if you’d like to schedule a consultation drop us a line. Your insights help us refine our services.

Addressing Market Volatility in Today's World
READ OUR LATEST GUIDE

Addressing Market Volatility in Today’s World

Planning for retirement is never a “set it and forget it” task. There are unexpected disasters, market drops, and changing laws that could cause retirees to reevaluate their financial situation. Ultimately, there’s no way to predict everything that will cause market downturns. However, you can prepare yourself for one by having a solid financial strategy […]

Still have questions?

Skip to content