Ways to Manage Your Wealth and Life Balance

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Ways to Manage Your Wealth and Life Balance

Are you nearing retirement? Take control of your finances today and start to achieve your own wealth-life balance.

Proper financial planning gives you the freedom to get more joy during your retirement, versus spending the next thirty years stressing out that you may or may not run out of money.

How to strike the right balance of enjoying your life while effectively saving for retirement looks different for everyone. For many seniors, retirement does not necessarily mean an end to working. In fact, 72% of workers over the age of 50 plan to keep working in retirement, according to a SHRM Study. If this isn’t how you envisioned your golden years, it’s time to take action.

Many people don’t budget because of the process it may entail. Listing out expenses, adding up numbers, and making sure everything aligns can become mundane. Budgeting isn’t always the most fun thing to do, but it’s important to have and stick to it. Even if you’re “bad with money”, all it takes to get your spending on track is a few hours working a budget each month, so why not do it? 

It’s important to focus on the value that budgeting will bring to your life. Refer to it often throughout the month to help guide your spending decisions.  At any given time during the month, you should have an idea of how much money you’re able to spend, considering any expenses you have left to pay.

Nowadays there are many budgeting apps that link to your bank account to track your spending habits. Create buckets for each expense and set a limit for monthly spending. If you’re still in the workforce, start with ensuring you budget 15% of your paycheck toward savings until you have a good three-month emergency fund. Next, keep budgeting the 15%, but start investing it into a 401(k) or a Roth IRA account. 

Whether you’re working or not, a great starting point is using online financial calculators. Get rolling with CKS Summit Group’s free financial calculators here.

Transitioning into retirement is appealing for many as it can still provide structure and meaning to your days, while still giving you more free time. If you have the option, start by gradually reducing your work days over time, or consider adopting a more flexible approach by contracting or freelancing a few days a week. This will give you time to adjust to a different routine and when you do eventually leave the work place it might seem less jarring.

Known as a “Phased Retirement”, retirees have more flexibility when accessing their pension, so transitioning into retirement has become more common. A few employers have formal phased retirement programs that allow for a reduced schedule or responsibilities prior to retirement, but most phased retirement arrangements are negotiated on an individual basis.

If you’re in a position where you want to start cutting back working hours or taking other steps to achieve a better work-life balance, financial planning can help you understand what your options are. By looking at what is most important to you, a customized financial plan could give you the option to reduce how much time you spend on work as you transition into retirement.

It’s also worth noting that when you retire affects your retirement benefits payout. If you delay collecting Social Security past your full retirement age, then you can collect more than your full, or normal, payout. In fact, if you put off claiming until age 70, then you will receive up to a 32% higher annual payout than if you started receiving benefits at full retirement. After age 70, there is no further incentive for delaying.

Just because you’re retiring, it doesn’t mean your life has to be 100% financial-focused, nor does it mean your life should feel less meaningful or unfulfilled – it’s a fantastic time to figure out what drives you, what’s interesting to you, and an opportunity to learn new things and take on new challenges!

As you transition into retirement, be sure to make an effort to make every day meaningful. Oxford University suggests that a meaningful life lessens the effects of aging. And, research from Patrick Hill and Nicholas Turiano found that people who have a sense or purpose or direction in life outlive their peers; In fact, people with a sense of purpose had a 15 percent lower risk of death, compared with those who said they were more or less aimless. And it didn’t seem to matter when people found their direction. It could be in their 20s, 50s, or 70s — even when controlled for other factors that affect longevity like age, gender, and emotional well-being.

The study found that a sense of purpose led to a longer life.

Planning, assessing, and updating your retirement plans should be on your monthly checklist — even after you retire. It is important to check in with your retirement income plan and adjust as necessary. This is why experienced financial advisors can be a major source of support and direction as you change your life in order to increase your work-family balance.

While it may feel like yet another pre-retirement challenge to undertake as you try to find work-life balance, financial planning will ultimately provide you peace of mind and more power over your current and future financial situation. Working with a financial advisor is a journey, and there are a few components you should keep in mind as you work together to achieve wealth-life balance.

Remember, retirement – and life in general – is not just about investments. How to structure your day in retirement, as well as when you are still working, can be just as important to your long-term success.

Budgeting doesn’t always have to be boring.  When it comes to effective financial planning and making the right decisions, talking to a professional financial advisor can be extremely beneficial.

The experts at CKS Summit Group have extensive knowledge of strategies to maximize your retirement savings. To learn more and start preparing for the future, contact CKS Summit Group here today.