Finances during retirement can be a huge source of anxiety.

When you pictured retirement, you probably imagined spending time on the beach, going on holiday at least once a year. However, we often discover the reality is not what we pictured.

We get to retirement and suddenly, we realise that it is not going to be smooth sailing. With a little bit of forward thinking we can turn the situation into a more comfortable experience. So, if you are at retirement age or already retired, try the following tips.

Get expert advice

Contact at least three different financial planners to give you feedback. This way you will be better advised in order to draw from and make good choices as to whom you would like to have as your permanent financial planner. Don’t make any hast decisions. Do your homework along with your planner. Don’t be blindsided and think of all possible scenarios.

Make sure you get a detailed analysis of your pension fund and savings. What investments do you have and how do they work, will you be able to cash in on those if you are in financial trouble?  

Budget

You should have a realistic budget for the days ahead. Daily expenses, monthly expenses, and your annual expenses. What events should you include in (or possibly excluding from) your budgeting?

A big one is the death of a spouse or partner. The death of a spouse is regarded as life’s number one stress factor and, sadly, losing a spouse is most likely to happen during your retirement years. 

With ageing comes ill-health, specifically diseases such as cancer, heart disease, dementia, joint disease together with mobility problems.

Don’t forget about adult children emigrating. Besides the emotional strain of having your adult children, and possibly your grandchildren, relocate to another country, it is quite possible that their departure will result in your support system collapsing. 

Many retirees hold onto the family home for sentimental reasons only to find themselves burdened with a large property, costly maintenance and upkeep which makes them feel overwhelmed, and eventually it becomes an illiquid, risky asset.

Most importantly, long term care may be needed when physical or mental disabilities impair your capacity to perform everyday basic tasks. As life expectancies increase, so does the potential need for long-term care.

What will your income be monthly and quarterly from investments? These will be added together and set off against the expenses.

Your financial planner should make a forecast on the rate of investment growth, inflation rate increases.

It is advisable to plan for the worst-case scenario at the earliest stage possible. You could be pleasantly surprised later to find that is better than anticipated.