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Planning Retirement Online

Making The Most of Our Money in Retirement

In later life, and particularly in retirement, many people have concerns about their finances. Most of us will be on a fixed income and there will probably be limited opportunities to materially increase that income through work. (Although, if you have a look at our Guide to Part-time Work in Retirement you may find help there if you want to find some work). So for many people, the focus on finance in retirement is to make the most of our money. The recent 'credit crunch' and recession have left many people feeling insecure and uncertain about their financial future, so making the most of our money has become even more important than it was in more settled times.

Concerns about finance can affect our whole outlook to later life, so sorting out our finances is very important both psychologically as well as practically. First of all we have to ensure that we can make ends meet. When we are confident that we can do that, then we can think about how to go about enjoying our later life as far as possible. Making the most of our money will help us to do that.

Thrifty Ways For Modern DaysThere are a number of things that we can and, in some cases, should do in order to help this process:

  • Analyse our finances so that we know exactly how much we have coming in and going out on a regular basis
  • Get some financial help
  • Put it where it is going to work hardest for us
  • Spend it wisely on the everyday necessities so that we have more to do with as we wish

Making the Most of our Money links

As we get older, and particularly in retirement, the ideal financial circumstances are low inflation and high interest rates. If we have any sort of pension, be it a company or state one, if inflation is high our pension will not keep up with the increase in the cost of living. Assuming that we have no mortgage in our later years, we want our money to make money for us. Hence our wish for low inflation and high interest rates. The problem is that the two are, by and large, linked, so we get high interest rates when inflation starts to rise ands vice-versa.

Currently we have low inflation, which is good, but also very low interest rates, whilst the vast majority of older and retired people want high interest rates. It was predicted that they would rise as we came out of recession but this has not happened, which has added to people's concerns. So the need to make the most of what we have in order to make it go as far as possible has become paramount.

That phrase, 'Make the most of our money' is key in later life and most people want to do it for one or more of four reasons:

  • In order to make ends meet
  • So that they can put a little bit away for a 'rainy day', for example if inflation does start getting higher again and the pension can't keep pace with it
  • So that they have a bit more to spend on enjoying later life rather than just surviving.
  • So that we can make better and more wide-ranging choices in retirement (see the page 'Analysing our Finances')

This Guide is to help you make the most of your money and to provide some help with your personal finances so that you will be able to make the most of your money so that you have more to spend or save as you want.

So click one of the links in the box and start the laterlife Guide to Making the Most of our Money.

This Guide is written by Retirement Specialist Dave Sinclair supported by members of the LaterLife team. As well as writing on retirement matters Dave is Training Director at LaterLife and responsible for the content and continuous improvement of LaterLife's Retirement Courses.
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