Skip to main content

5 Tips for the New Retiree

By U.S. News & World Report

One of the most important and difficult financial decisions most people will make is when to retire.

As most investors know, it is critical to be financially secure to do so. But once you make the giant leap into retirement, the following decision to consider is what to do next — not only from a lifestyle perspective, but also from a financial standpoint. Many people often underestimate the ensuing money management questions about how to handle their finances if they have a surplus of assets to live on.

[See: The Best ETFs Retirees Can Buy.]

To help guide potential and upcoming retirees, here are a few steps to help you responsibly and effectively enjoy the wealth you have accumulated and achieve the stress-free retirement that you’ve always imagined.

Calculate your monthly income and create a budget. It is crucial to have an income and correlating budget that aligns with your desired lifestyle. Factor in how much you want to spend on housing (if you don’t already own a home, or if you want to purchase a second home), daily living costs, vacations, and other expenses that may be important to you, such as paying for your grandchildren’s education or contributing more to charity. Also think about whether or not you’ll want to pick up a part-time job to keep you active or pursue a new interest, which would provide additional income. Finally, consider that life expectancy is getting longer, so make sure to factor in what will hopefully be a long and healthy life.

Wait to claim your Social Security. As most investors understand, Social Security alone does not provide enough money for a comfortable retirement. But regardless of your income, and especially if you have a considerable amount of assets, you should wait as long as possible to claim it rather than doing so as soon as you’re technically able (at age 62), as payments will increase 8 percent each year you delay until age 70. Work with your financial advisor to calculate the best timing for you to file for Social Security, and only do so earlier as a last resort.

[See: 7 Stocks to Buy for the Baby Boomer Retirement Wave.]

Oversee estate planning. If you’ve reached retirement, you should have already begun preparing your estate with a will or trust. Review all of your estate planning documents periodically with your children and other relevant family members so that your wishes are communicated, and your heirs know where your assets and accounts are located. These conversations are not always easy and as a result often get pushed to the back burner, but the topics of estate planning and transfer of wealth are two of the most important aspects of your financial picture. Make sure you — and your family members — are prepared for the inevitable throughout your retired years.

Pass on your financial knowledge to your family. You’ve been financially successful, so now is the time to pass along saving and investment principles to your children or grandchildren. Discussing key principles such as starting an emergency fund, contributing to a retirement plan and paying off debts quickly will help encourage them to follow in your footsteps and start building their own successful financial future. Even if you are contributing to their 529 plan for college or creating a trust fund for them, they will someday appreciate the financial wisdom you imparted and hopefully incorporate it into their own financial plan.

Enjoy yourself. Now is the time to (responsibly) use the money you’ve worked so hard to earn, save and invest over your lifetime. Envision what happiness in retirement means to you (connection, exploration, or knowledge, for example), and then get started. Whether it’s spending time with family and friends, pursuing a passion project, volunteering with an organization you care about or traveling the world, you’ll likely soon find that you’re being rewarded for your diligence and dedication throughout the years.

[See: 9 Psychological Biases That Hurt Investors.]

It never hurts to speak with your financial advisor to make certain you are considering the many factors that play into a retirement strategy. Even if you have worked hard to assure that your retirement savings have extra padding, taking these steps will ensure that you’re on your way to many years of relaxation and enjoyment. You’ve earned it!

More from U.S. News

20 Awesome Dividend Stocks for Guaranteed Income

6 Things to Know About Mark Zuckerberg’s Manifesto

7 of the Best Health Care Stocks to Buy for 2017

5 Tips for the New Retiree originally appeared on usnews.com

Don’t Settle for Student Loans to Pay for Online Education

By WTOP Staff
Online college programs are becoming a more popular choice for prospective students, with one study finding that more than 6 million students enrolled in at least one online course in fall 2015. The popularity of these courses can be attributed in part to their flexibility with working adults' schedules, students' ability to progress more quickly through online programs and, oftentimes, cheaper tuition. [See 10 low-cost online bachelor's programs for out-of-state students.]Online degrees can be beneficial to many college students, but some studies have shown online learners complete their programs at lower rates than students at traditional brick-and-mortar campuses. Individuals with student loans but no degree comprise two-thirds of defaulted borrowers. Though these numbers are not encouraging, just like for traditional programs, there are ways to reduce how much you'll need to borrow for an online program to ensure you won't become one of these statistics. Don't just settle on borrowing student loans to cover the whole cost of your program and living expenses. Instead, start thinking about how to cut costs and cover your balance in different ways, such as the following. -- Grants and scholarships: Even though you are taking an online course, you can still apply and receive grants and scholarships. But your first step should be to complete the Free Application for Federal Student Aid, commonly referred to as the FAFSA, which will allow you to receive a Pell Grant if your expected family contribution is low enough. The EFC criteria and award amounts are adjusted annually, but the 2017-2018 academic year awards range from $606 to $5,920, which could significantly lower the amount you borrow annually. Your next step is to apply for scholarships. You can start by checking online scholarship search engines, such as the Salt Scholarship Search, College Board's BigFuture and Peterson's. But don't forget to take advantage of local organizations and your school's financial aid office. Both may offer scholarships that you can't find with a national scholarship search. [Review these 10 sites to kick off your scholarship search.]For instance, organizations like the Elks Club, Knights of Columbus or the Rotary Club typically offer scholarships annually to local students. Just because you're going to school online doesn't mean you're ineligible. Visit your local library for scholarship listings, and ask around town. You might be surprised how many local organizations offer scholarships. While these scholarships typically aren't large, every little bit counts. Each dollar you receive in a scholarship is a dollar you don't have to borrow and pay interest on. -- Work-study: Another option for online students may be work-study awards. Not all students enrolled in online programs are eligible, but students at some schools -- including, for example, SUNY Empire State College and Liberty University -- are. Work-study awards are not given upfront like scholarships and grants. In most cases, they are an offer to earn up to the awarded amount if you secure an eligible work-study job. While there is a misconception that all work-study jobs must be on campus, students can work for off-campus, nonprofit or public employers as long as the work is in the public's interest. You may be able to work for a for-profit employer if the job is relevant to your course of study. No matter who the outside employer is, it will need to have an established agreement with your college for you to receive work-study funds. Remember, to be eligible for federal financial aid, you must be enrolled and pursuing a degree or certificate. If you're not working toward a credential, Pell Grants and work-study won't be option, but you may still be able to take advantage of private scholarships -- just be sure to read the eligibility criteria carefully. [Explore what to know about financial aid in online programs.]-- Pay as you go: One of the great benefits to enrolling online is the flexible schedule, which can allow you to complete your college coursework around your responsibilities. But prospective students often overlook using their part- or full-time job earnings as an option for paying for college. Almost 80 percent of college students in 2015 worked at least part time while attending classes, according to the National Center for Education Statistics. By budgeting and thinking strategically about your college costs, you can likely reduce your dependence on student loans by paying a portion out of pocket. Many -- but not all -- online programs are less expensive than traditional programs and often have shorter payment periods. Six, eight or 10 weeks are common course durations. Because of the frequency of payments in an online setting, you may be well-placed to pay as you go and possibly avoid borrowing altogether. Attending college online and avoiding student loans may be challenging, but if you are willing to put in the effort, you can limit the amount you need to borrow. More from U.S. News Q&A: Understanding Student Loan Discharge Eligibility Student Loan Refinancing Isn't Right for All Borrowers
Read Next Story

Related News

Frustration grows in Venezuela as earthquake death toll reaches 1,430

Israel and Lebanon sign framework agreement with US in ‘first step’ toward peace, Rubio says

Trump-endorsed populist poised to become Colombia’s next president as rival challenges vote