Your retirement years are the perfect time to enjoy yourself and do those things you’ve been putting off. But before you do that, you must learn how to manage your money wisely.
This article will look at a few financial tips for women over 60.
Put your insecurities to rest
Many women feel that managing money is not their cup of tea. While things are changing for the better, senior women still have a long way to go.
Many women at this age have to handle finances after the death of their husbands for the first time. Hence, it is normal for senior ladies to get worried and doubt their abilities.
So, the first step that women who have never handled finances is to put their insecurities to rest. Having a financial advisor can immensely help women to take charge of their finances and make the right choice.
Acquire financial knowledge
It is never too late to start learning on any topic, including investments. It is important to understand the various aspects of investments and the financial world before making any investments or saving for your golden years.
Increasing your investment knowledge and skills will also help you become more confident in handling your money matters.
Understand the risks associated with different investment options to take calculated risks.
Get ready for retirement
It’s time to get serious about funding your golden years. Do you want to continue working after retirement or get a part-time job? Check if there are funds that can help you to lead a comfortable life. The best way would be to align living costs with anticipated retirement income.
In this stage, you are going to need money when you’re no longer working, and you need to make sure that the money will last.
Create an investment portfolio. Equity investments such as equity mutual funds or stocks of high-quality companies can help you to get reasonable returns over the long run and help you beat inflation. If you don’t want to invest in individual stocks or mutual funds, consider debt funds that are relatively less volatile than equities. However, it needs to be noted that if you are in your 60s, you might live up to more than 90 years. In that case, shunning equities completely might not be the best option.
Don’t ignore the emergency fund
An emergency fund is also an important aspect in your 60s. We can say that it is more important for senior women as there are higher chances of illness and other health ailments that might require a considerable sum of money. In addition, you might have to take care of unexpected expenses.
So, having an emergency fund with a suitable corpus amount that aligns with your future possibilities and takes care of emergencies is important. While you might be able to ask for money from your adult children, it would be best not to depend on them.
Check financial documents
While we don’t like to think about unfortunate events, it is life’s reality. There is no denying the fact that women tend to live longer than their male counterparts. So, if you are a senior lady with a husband, you can take an interest in the financial aspects your husband currently manages. And, being prepared and familiar with his financial documents such as existing loans, bills, investments and insurance policies are crucial. This will make sure that you don’t have harrowing experience organising these things after his death. It would also be a wise decision to ask your husband to set up a meeting with his financial advisor or insurance agents so that you can reach out to them whenever required.
Know how to withdraw money from your retirement kitty
There are different retirement investment options. In the case of most retirement options, such as NPS and pension plans by insurance companies, you can buy an annuity plan and receive a fixed monthly payment based on your total contribution and the annuity term, among other factors.
However, if you have investments in mutual funds, you might have to fix a comfortable withdrawal rate.
Typically, 4% is the thumb rule for withdrawal of funds in the first year after retirement. After that, you can increase the withdrawal rate based on the annual inflation rate. The 4% rule is a thumb rule and it might not work for everyone.
However, it would be best to keep expenses at the minimum and diligently plan your finances for other financial goals, such as a vacation.
It is never too late to plan for your future. There is no reason to self-doubt if you are a woman above 60 who has never handled money. Now is the time to take control of your financial matters so you can reap the benefits during these golden years.
Padmaja Choudhury is a freelance financial content writer. With around six years of total experience, mutual funds and personal finance are her focus areas.