Don’t outlive your retirement savings with these tips

Retiring can be the start of an exciting era, with time to embark on all kinds of projects that were previously not possible. However, you still need cash to live and to pursue hobbies, so you want to be sure that the investments you have in place are adequate to meet all your needs.

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Develop a strategy

Successful retirement often means living on a fixed income, so living within this income is vital. At the same time, you want to enjoy this time and not deprive yourself, so balance is extremely important. For some retirees, exhausting their savings is a concern.

The first step is realistic assessment of how much you put aside to live on in your retirement. Retirees must be careful not to withdraw excessive amounts from their retirement nest egg in the first year or two, as this could have a negative impact on available capital in years to come. Reducing your capital too much, too soon, will affect the nest egg’s ability to generate compound interest.

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A general rule

One retirement planner devised the 4 per cent rule. This states that whatever your nest egg is, you can take 4 per cent of it each year, adding in a percentage to account for inflation. However, in the age of low interest rates, this model may not work as well as it did in the past.

Having enough to live on in retirement also means saving and investing money when you are younger. Many people in the UK are not putting enough aside to live well in retirement, according to this report in The Guardian.

Consulting a professional can be helpful. If your financial advisor has access to financial advisor software, they will be able to model a wide range of financial situations and outcomes for you in a matter of moments. If you are thinking about using financial advisor software in your business, look into reputable suppliers such as https://www.intelliflo.com/financial-adviser-software to see what options are available.

To enjoy retirement as much as possible, financial infrastructure must be in place. It is never too early think about retirement planning and getting into the habit of putting aside some money for later years. This is especially important if you want to have an active retirement that includes activities and travel.