Hoarding as much money as possible before retiring is a natural thing, but you also need to have a strategy and careful planning to distribute the money.
Quoted from Forbes, there are several things to consider when you are managing your retirement money.
Check out these tips to save your money before retiring:
Ask yourself with several questions
How good is your retirement fund distribution strategy? A good strategy is one that can answer these questions:
How should my investment money be allocated for retirement? How much money should I use to be able to live comfortably and what investment risks can I take? What limits should I set so that I don’t withdraw too much money? What other source of income aside from investment and Social Security can I have access to? Utilization of the best assets such as what can be done in retirement?
Strategy of distributing pension funds
Of course, we must set aside time and energy in the phase of financial accumulation.
This is the part that is paid attention to to reach a successful pension. Thus, we need a pension accumulation strategy, but there are other things that are just as important (and often ignored), that is we need a strategy of distributing pension funds.
Wade Pfau in his book, How Much Can I Spend in Retirement, states that there are two kinds of thought regarding retirement income planning. The first is a probability-based approach and the second is “safety first”.
The solution for managing pension money is to match fixed and important expenses with income earned from severance pay. The first step is to determine which strategy is right for you. It allows you to know what the important role of investment is in the overall retirement plan later, how to make spending decisions and allocate your money. If you plan well, you will have confidence financially to enjoy retirement and peace of mind, that you are on the right track.
Read more: How to Manage Personal Finances during Discount Events
