How to make the most of your money in retirement
The Retirement Planning Council of Ireland (RPCI) is advising retirees to get organised and start thinking about their finances this January. By establishing new saving and spending habits, retirees can avoid falling victim to common financial mistakes in 2020.
Make a plan
The average worker gets back 50 hours per week in retirement and according to the RPCI, it is easier to spend money when you are not working. Establishing a plan will allow retirees to closely monitor income and outgoings to ensure they have a grasp of their financial position.
Course Leader for the Retirement Planning Council of Ireland and former Pensions Ombudsman Paul Kenny said: “It is useful to know what’s coming in, and when, what the likely expenditure is, and when it is likely to arise. That way, you can anticipate large outgoings (such as a tank of heating oil) and put some money aside regularly for those.”
“New retirees should budget for miscellaneous spending each month, including coffees, lunches, books and clothes. It is also a good idea to use cash during the first weeks of retirement – as it feels like real spending – instead of tapping a bank card, where the charge might not be taken from your account for 2-3 working days. This is recommended to measure and control spending.”
File a tax return
According to Paul, one of the first steps to take is to file a tax return. PAYE tax payers, should make sure they complete a tax return to ensure they are getting the allowances and credits they are entitled to.
“First off – and this doesn’t just apply to retirees – make a tax return. People on PAYE often don’t feel the need to make regular returns, but it is a useful way of ensuring that you get all your entitlements, such as age allowance. Revenue can also look back over four years, to see if there are things you missed out on previously.”
Spread out payments
The not-for-profit organisation is also advising retirees to look at spreading out payments over a period rather than being met with lump sum payments.
“Many companies, such as motor and home insurers, will allow payments to be spread over most of the year, in some cases without any extra charge.”
The RPCI also notes the importance of shopping around with different service providers to get the best deals.
“Retirees should look to shop around and be open to switching service providers in order to save money. Bonkers.ie is a free and impartial service, where you can compare charges for gas and electricity, broadband, phone and TV providers, banking services and insurances such as life, health and serious illness cover.
Ask for discounts
“Older people should also be aware of discounts that are available in retirement. Many retailers offer discounts to older people, usually on specified days of the week. Some gyms offer reduced membership prices for daytime hours, when other members are at work.”