Managing Your Finances Over 50 – A Short Guide
Retirement age is much closer than many of us expect – if not for the rate at which we might be saving our money, then for the swift passage of time.
Planning for retirement can be a frustrating and involved endeavour, but is nothing short of vital from a financial perspective.
What are some key tips for managing finances as an over-50?
Budgeting
Just as financial literacy is important for people at the start of their savings journey, so too is it important for them as they approach the end of their working career.
Indeed, budgeting is a vital part of making retirement finances work for you.
Even if you have gone to great lengths to secure a bountiful retirement income after ending work, the amount you will receive is essential finite.
This makes a weekly budget vital to ensuring you get the most out of your income without depleting it prematurely.
There are plenty of online tools you can use (and let us not forget the offline methods) that can help with budgeting.
Some of these tools may have monthly/one-off payments, but the short-term loss is very much a long-term gain.
These tools are a great way to keep track of your outgoings whilst also suggesting ways additional money could be saved.
Financial Products
As an over-50, you lose access to certain financial products – but, crucially, gain access to other financial products that could benefit you in different and even greater ways.
A key example of the former lies in the LISA, or Lifetime ISA.
LISAs are special kinds of ISA that see the government ‘top up’ contributions by 25% – up to a pre-set maximum per year.
The caveat is that the money must be utilised for either the purchase of a first home, or for retirement.
As such, there is an age cap of 39 on the LISA, which precludes older people from benefiting.
However, those of age 55 or older become eligible for a different kind of financial product, in the form of an equity release scheme or ‘lifetime mortgage’.
These loan schemes effectively advance you some of the equity that lies in your home, to be repaid on the eventual sale of the home.
The possibilities differ from applicant to applicant and from home to home, but an equity release calculator can be used to demonstrate what you might be eligible for.
Equity release is a useful product for financing major home renovations or once-in-lifetime holiday.
Quality-of-Life Changes
While budgeting and financial products together represent a key majority of your retirement savings mission.
There are numerous small things you can do to make life more affordable after your income switches to pension, savings and investment returns.
For example, the current energy prices in the UK compared to 2020, people are paying considerably higher prices.
By paying close attention to the cost of energy and the offers put forward by other suppliers, can help save you hundreds per year.
Likewise, investing in energy efficiency measures in your home can reduce the amount you end up spending monthly for energy.
This is one that you may want to keep an eye on with an online app or by ensuring that a smart meter is installed.
You’ll be able to see your gas and electric usage much clearer and give you a better picture of where and when you could potentially reduce the energy consumption.
Considering other alternatives
As mentioned above, with the increase in energy costs, people are now considering other alternatives rather than the standard way to get gas and electric into the household.
Thankfully, there are plenty of other options available.
Solar Panels are one of the most common ways to generate renewable energy as they have continued to develop and improve through the years, making them a great alternative to energy from the national grid.
Though electricity may only be generated through the panels, they can be a great investment for the future.
By correctly managing your finances and ensuring you’re investing in ways to help save money, it will only improve your savings and the money you have for your retirement, which you can then spend as you please!
