You are using an older browser version. Please use a supported version for the best MSN experience.

Here Is How To Manage Your Finances In Your Retirement Years logo 13-01-2021 Adhil Shetty
a close up of a sign © Provided by

Of all financial goals, planning for retirement is clearly the most important because you may cease to have a regular income once you hang your boots. It may also not be enough to simply accumulate a retirement corpus. You must also proactively manage this money. You have to maximise returns, minimise risks, and ensure your retirement fund doesn’t exhaust in your lifetime. Thus, managing your finances after retirement is as important as managing your finances for retirement. Here a few tips to do so.

Prepare A Budget 

People have this notion that their expenses reduce in retirement. It’s true to an extent. But while some expenses like daily transportation costs fall, others like healthcare costs rise. You must budget at all times to manage your money. A well-thought budget helps you live within your means, allowing your savings to last longer. Good budgeting helps you find financial focus: you can prioritise what’s truly important and cut out what’s not.

Focus On Regular Income

Your regular income may dry up after retirement. But with an effective investment plan, you can ensure regular income during your golden years. Your retirement corpus should be parked in investments that generate regular income to meet your day-to-day expenses. If you have received a sizeable retirement payout, you must find investment options to maximise rewards while generating income. Avenues such as fixed deposits (FD), mutual funds, small savings schemes such as Senior Citizens Savings Schemes etc are some of the preferred investment options for the retired. You must also keep one part of the retirement fund in a liquid state so that it remains safe and accessible, and the rest in various schemes so that the money continues to appreciate. You can consider FD laddering – an investment strategy in which you stagger your FD investments across multiple tenors, which allows you to get better average interest returns. And while retirement is your time to relax, you can consider part-time jobs or freelancing to boost your income and keep the retirement corpus intact.

Prioritise Spending

Exhausting the entire retirement corpus can create financial duress for retirees. They must prioritise spending by categorization of long-term or short-term spends. Ideally, the focus should be spending below the planned limits.

Ensure Financial Security With Health Insurance

Your healthcare needs would demand extra attention in later years. With age, health concerns multiply so you should be well-equipped with funds to deal with rising medical costs. A comprehensive health insurance plan has the potential to help you sail through medical emergencies. For this, your health insurance needs to be reviewed periodically and the sum assured increased, if required. Usually, health insurance companies allow new entries in regular policies up to around 65 years. Even if you have crossed the upper age ceiling, consider taking a senior citizen health insurance policy. If the cover size is inadequate, you may buy a super-top-up health policy. Health insurance significantly reduces your expenses during medical emergencies.

Be Tax Efficient

You may not want to lose a big portion of your income in taxes. After retirement, you should plan your tax-saving efficiently. You may invest money in tax saving schemes such as tax-saver FDs, NSC, SCSS, etc. Avoid investing in tax saver schemes that provide low returns and have long lock-ins.

Regularly Check The Effectiveness Of Your Retirement Plan

You must review the effectiveness of your retirement plan regularly. If your investments are not generating desired returns, you may need to take effective measures like making fresh investments, rebalancing your portfolio, etc. Don’t hesitate in consulting a certified investment planner if you require help. It is also crucial to enter your retirement phase without any costly debt or liabilities. You may consult a financial planner to check your plan’s effectiveness from time to time.

Post-retirement financial risks are high. Capital safety is of utmost concern. Ensure liquidity, optimal growth of your capital, health insurance coverage, and keep a clean slate with debt.

The writer is CEO,, India’s leading online marketplace for loans and credit cards.

More From
image beaconimage beaconimage beacon