Managing Money

Most people approach retirement with a degree of concern over their financial circumstances and how this may impact their lifestyle.

That’s because, almost certainly, they will have less to spend than in the past.

The best way to allay those fears is to take control of our finances, rather than just hope for the best.

More than that, we should also remember the words often used in church when the offering is presented, ‘All things come from you O Lord’. And the Bible’s wisdom that, ‘Whoever trusts in his riches will fall’ (Proverbs 11.28). Whatever financial resources we have, they are not primarily ours.

  • Will I have enough to live on?

    A wise step is to create a schedule of all income and all ‘normal’ household expenditure. Or, to use a word that strikes terror into the hearts of many, ‘a budget’. As in all aspects of a successful retirement, this should be a joint exercise with your spouse or partner if appropriate.

    Income is usually the easy bit. The challenge is to examine what you will be spending, line by line.

    The good news is, in retirement, many expenses reduce. This can include –

    1. Any income from continuing work not being subject to the deduction of national insurance or pension payments.
    2. No cost of travel to work, or the need for ‘working clothes’.
    3. The day to day costs of being in the workplace – coffee, lunch, etc.

    The budget exercise will reveal if you have a shortfall to deal with or how much disposable income is available to fund your increased leisure time. This will inform major decisions such as downsizing your property or moving to a cheaper location.

    There are often opportunities for part time or casual work which can provide valuable social contact as well as extra income. You may need to look to your savings or possibly Welfare Benefits to fund an income shortfall.

  • How will I use my savings?

    Retirement and the provision of a lump sum may be the first time you have had significant savings or capital. This is the opportunity to discuss your priorities. For example you may want to:

    • Keep it all to pass to children or other relatives
    • Spend the lot
    • Save it for later care needs
    • Go travelling.
    • Give it away

    Most people have a mix of objectives. But now is a good time to consider and discuss what these are.

    Any investment decisions should be carefully discussed with a qualified professional, such as an FCA registered Independent Financial Adviser (IFA).

  • Top tips for your money in retirement

    Maximise your income: If you have been in multiple employments, make sure you track down all your pension entitlements and have the advice of an Independent Financial Adviser about consolidating your pensions and making the most of them.

    Recent pension reforms allow the flexible drawdown of pensions. This is a complex and specialist area for which you need qualified and independent advice.

    If you have very little private pension income, make sure you investigate the benefits and help that may be available. Citizens Advice is a useful source of information on things like:

    • Council Tax Reduction, and Housing Benefit.
    • Utility companies that may offer special rates to those on a low income.
    • Disability benefits

    Think it through: With the help of your spouse, if that is relevant, work through:

    • How your income and savings should be kept, how they are accessed (sole joint accounts and passwords) and what will be the survivor’s financial position.
    • How long you intend to stay in your current home – will it be easy to run as you get older, will it always offer easy access shops and services, will you need some of the capital from your property in due course.
    • Do you need the car or cars you have at the moment or are there savings to be made?
    • Splashing out or penny pinching – the early retirement years are when you are likely to be at your fittest and can get travel insurance at a reasonable price. So is now is the time to take adventurous trips or visit distant relatives?

    Look for savings: Check out the many valuable concessions available to all ‘seniors’. Things like:

    • Free bus pass and reduced travel on Network Rail and via Senior Coach cards
    • Entrance to theatres, cinemas, sporting events and other attractions – it never hurts to ask
    • Retailer’s special discounts such as B&Q Diamond and High Street Opticians

    Pay off debts: Take all possible steps to pay off any high interest rate credit cards, store cards, overdrafts, and personal loans. If these are seriously out of hand, seek the help of Christians Against Poverty which offers wise advice and practical help in circumstances like these.

Found a way to save money or make it go further in your retirement? Please tell – join our Facebook community and share. And Sign Up to our blog.

The word retirement is not even in the Bible. What is taught in scripture is transition. There is nothing that says you work most of your life and then get to be selfish for the next 20 years"

Rick Warren, PurposeDrivenLife