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3 Money Moves To Make During Your First Year Of Retirement

3 Money Moves to Make During Your First Year of Retirement

While some seniors enjoy the transition into retirement and less pressured lifestyle that comes along with it, others inevitably find it disconcerting. After all, retirement signifies a number of changes, and adjusting to them is often easier said than done. To ensure that things go smoothly from a financial perspective, here are three key money moves it pays to make once retirement begins.

1. Create a new budget

Some people are quick to assume that their expenses will drop significantly once they stop working, but believe it or not, a whopping 46% of households end up spending more money, not less, during their first few years of retirement. That’s why it’s crucial to establish a whole new retirement budget that not only more accurately reflects your costs, but is based on your anticipated income.

Retired couple working on a painting
IMAGE SOURCE: GETTY IMAGES.

When creating your retirement budget, don’t forget to account for a rise in healthcare and leisure spending. Once you move off a company insurance plan and over to Medicare, there’s a chance you’ll end up spending more on healthcare than you did back when you were working. Furthermore, because you’ll have an abundance of free time on your hands, you can expect to shell out more money for entertainment. Being mindful of these costs will help you map out a precise retirement budget that allows you to stretch your limited income the furthest.

2. Review your investment mix

The investments you hold during your working years aren’t necessarily the ones you should retain in retirement. While it’s OK to take on some risk in your retirement portfolio, you should also make sure to shift some of your more aggressive investments, like stocks, into conservative alternatives, like bonds. The reason? Since you’ll no longer be collecting a salary, you might need to liquidate those assets on a regular basis as a means of accessing cash to pay the bills — so the less volatile your investments, the less likely you are to lose money.

But don’t rush to move all of your investments out of stocks; you still want…

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