Category / Retirement


How to: Start Saving for Retirement in your 40s

If you’ve reached your 40s without starting to save for retirement, you could be forgiven for feeling slightly nervous about the future. The important thing to remember is that it’s never too late to start preparing for later life.

Get Straight

First thing’s first: you need to get straight.

With the recent state of economy, the reality for many is unpaid debt on credit cards or loans. Expensive debts need to be paid off as a priority, as you’re essentially wasting money in just paying off the interest.

Good tools for helping you to do this are software such as Microsoft Money, or even a standard excel spread sheet. Use these to calculate your incoming vs. outgoing funds, and how much you can realistically afford to pay back each month.

Enter Your Company Pension Scheme

By the time you hit 40 the likelihood is that you’ll have reached your peak in your chosen career route, so now is a great time be putting part of your salary aside into a pension plan.

A company pension plan is especially appealing because it essentially acts as a pay rise.  If your company has a scheme in place, they will start making contributions on your behalf based on the percentage of your salary that you decide to save.  If you don’t take it, you’re effectively turning down free money.

Make an Investment in Property

If you have already invested in property, this will go some way to help you afford later life.

If you haven’t yet invested but it’s viable to do so, then you should definitely consider it. A property is a really lucrative asset to have when the cost of retirement looms, particularly if at some point you need to move to a care home.

Delaying purchase until your 40s means that you’re in danger of on-going mortgage repayments into your 60’s and possibly even your 70’s. However, the state pension age for women is due to be brought into line with men at 65 in 2018 before rising to 66 by 2020 and 67 by 2028, so if you invest now, there’s still time to arrange for the mortgage to be paid in full by the time you hit retirement.


Don’t bury your head in the sand.

Yes, your 40s are regarded as late for starting to save for retirement, but always better to be late than never. You’ve still got plenty of working years ahead, so can still afford to make investments and build up a tidy nest-egg.

Secondly, don’t panic. If you know that you don’t have the time and resource to save for every eventuality in later life, you’re not doomed. In some circumstances, the government are legally obliged to pay care home fees on a person’s behalf.  Through the NHS Continuing Care program, the NHS will fund the full cost of care, including accommodation and nursing costs if ill-health is the primary reason for entering a home. 

This article was contributed by Laura Moulden on behalf of Cheselden. Visit the website to find out if you may be eligible for a care fee refund.


How to maximise your funds during retirement

Many people live in fear that they won’t have enough money to get them through retirement. Instead of being a well-deserved break from the working world, it turns into an ocean of anxiety with fears that you won’t be able to make ends meet from one month to the next. Angela Swan, Brand Development Manager for Sell Pension, discusses how you can maximise your funds during retirement.

You’ve worked hard all your life and saved as much money as you could, and now you feel like you deserve a break and have earned the chance to spend a little bit more. While it’s true the end of your working life does save you some money – you don’t have to pay commuting costs anymore or those over-priced lunches – but will it really be enough to make you feel secure?

Sometimes your pension just doesn’t seem like it could last you through your entire retirement. Don’t worry, just because your salary has stopped rolling in, it doesn’t mean that there aren’t other ways to create new funds and supplement the earnings from your pension pot.

Relocate to a cheaper area

Retirement is a huge transition in anyone’s life, which can sometimes be difficult to adjust to. Use retirement as a fantastic opportunity to make a big change, for example if you’ve lived in the city for years to be closer to work, then perhaps you could relocate to the country or a completely different area. Relocating could reduce your outgoings by a huge amount, especially if you have a large house and are downsizing.

Turn your hobby into a business

Having a hobby throughout retirement is a great way to keep yourself busy and active, and there’s no reason why it can’t be turned into a lucrative business. Craft hobbies, such as cushion making, homemade decorations and furniture are a joy to make and have become increasingly popular.

Do your market research before making any big decisions and invest some savings into your venture slowly.

Put money aside for an emergency

There’s nothing worse than budgeting for a comfortable retirement, but not including emergencies into the budget and draining your remaining resources as a result.

Accidents can happen, whether it’s your home or a medical problem, sometimes an unexpected event can cause your savings to plummet. Ensure that if the worst does happen and you do need some extra cash, that you have already put some safely aside to cover any unfortunate events. If the money is never needed during your retirement, think of it as a nest egg that can go straight to your loved ones.


10 ways you save money when you retire

There was a time, when people approaching their sixties would dread the thought of retirement. How would it be possible to maintain the same lifestyle, without a steady flow of regular income? The answer to that horrifying question is simple Individual Retirement Accounts. For example, IRA services provided by Charles Schwab ensures that you’ll get personal investment guidance and great tools and resources—all with no account service fees. One must plan his retirement early in life or as they say, during the “sunny days”. In this article today we take a look at the most popular ways to save money post retirement;

  • The Individual Retirement Account: Be it then or now, IRAs win hands down. Based on whether you choose to go with the Traditional IRAs or a Roth IRA you can enjoy tax benefits by making contributions here. So even when you retire, IRAs ensure that between ‘death and taxes’ there is one, from whom you can escape safely. 
  • Higher rate of interests enjoyed: Banks and other financial institutions often offer higher rates of interests to the retired senior citizens. So if you were saving $1000 at 50, your return after a year would be a sum of $1050; if you save the same amount at 60 you get back $1100 after a year. 
  • Lower medical bills: Ideally. As you grow older your medical expenses should multiply. There are certain places however, where treatment to the retired elderly are done at a reduced rate. 
  • Lessen the shimmer: Research shows that a majority of your earnings is invested in maintaining your look and clothes. With no offices to go to, once you have retired, no need to spend hundreds of dollars on those items. Save that sum and instead prioritize your requirements judiciously. 
  • Forget Insurance and loans: So you have houses and cars, which you bought on loan at 30 and have been replaying the amount all your life? And added to that you also had to take insurance coverage? In all likelihood by the time you retire, you have probably washed your hands off these. 
  • The Annual Gas Contract: Once you have retired, you don’t really need to drive that fancy sedan to work. You may be thinking that driving to work cost you only about $20 everyday. But think of it as an annual figure and you will realize, what a lump sum of money you save post retirement. Alternatively, start taking strolls and walk 
  • Frugal Living: So your youth is gone and there is no reason why you need to live king size in a French Chateau. Restricting your living area to smaller houses not only saves you the burden of paying higher taxes but also is easier to maintain. 
  • Healthy eating and lesser fine dining: Keeping in mind that while working you probably had a larger social circle, it is likely that the circle will lessen post retirement. So do away with those fine dining places, which cost you a bomb shell and concentrate more on dining at home. 
  • Relocating: Ever considered taking up challenges post retirement? If yes, then leave the hustle of city life and relocate to a countryside or residential area. Not only will it bring down your living expenses, but also instill a sense of communal belonging, often missing in cities. 
  • Save something: It is likely that when you were working, you were covered under the company’s pension scheme. Once retired, this is a ready source of income. Consider saving a portion of this amount instead of spending it all.

    Retirement can be a fun activity if planned in advance, meticulously. These real money sparing tips help you through the thick and thin of retirement! 


The Benefits of Assisted Living

As many people age, they often feel isolated and lonely with their grown children tending to families and lives of their own, so geriatric depression is a real concern. This has led many elderly individuals to look into assisted living facilities. These facilities provide social and recreational opportunities for residents, as well as increased safety and quality of life. If you are considering moving yourself or a loved one into an assisted living facility, consider the following benefits of these facilities.

Assisted Living Enhances the Quality of Life

Every benefit of staying in an assisted living facility increases the patient’s quality of life. They will become more comfortable, healthy and social.

  • Safety. Perhaps the greatest benefit of assisted living facilities is the immediate safety that they provide. As seniors age, they may become physically weak, visually impaired or unsteady. A living facility provides the safety to help protect them from a serious injury. The staff will be able to assist them with walking and carrying out tasks. If there is an injury, they won’t be alone for very long before receiving help; in fact, these facilities are specifically designed to minimize the risk of accidents.
  • Social and Recreational Activities. According to Assisted Living Today, an assisted living information resource, another great benefit of assisted living facilities is the social and recreational activities that are provided. One of the sad truths of life is that growing old also means losing friends and family. This can create a secluded lifestyle; however, staying at an assisted living facility will enable elderly patients to spend time with others and enjoy new activities.
  • Health Care When It’s Needed. The exact qualifications and hours of the nursing staff will vary by facility; however, nurses will always be available. Patients staying in assisted living facilities will always receive the health care they need — when they need it. This may mean ensuring that their medication program is adhered to or that regular doctor visits are coordinated. The on-hand medical staff will also be helpful in the case of a health emergency, being able to provide immediate care and transportation to a hospital.

How Can I Afford the Stay?

Long-term care at an assisted living facility can be expensive. Depending on the facility and type of care required, Forbes states that it can cost $40,000 to $90,000 per year to stay in these facilities. Fortunately, a type of insurance is available that provides coverage in the event an extended stay becomes necessary: long-term care insurance. A long-term care insurance plan will help cover the cost of staying at any type of assisted living facility.

According to the Wall Street Journal, 70 percent of individuals who reach age 65 will require some form of long-term care. Having a long-term care insurance plan guarantees that you receive the coverage you need when you need it. If you need to stay at an assisted living facility without long-term care insurance, you may end up not going for lack of funds or for fear of draining your retirement account. Your children may be unable to pay the cost and you’ll remain living on your own, even though a facility is a better option for you. Long-term care insurance eliminates this problem and will enable you to check in immediately.

You may currently have an elderly relative who would benefit from staying at an assisted living facility. You may also recognize that you are aging and may require an assisted living facility in your future. Long-term care insurance is a great way to afford the cost of assisted living so that you and your loved ones can enjoy a high quality of life. The many benefits of assisted living facilities make the cost of the insurance premium a worthwhile expense.

About the Author: Charles Wilhelm is a contributing writer and a patient at an assisted living facility. Although he was hesitant to stay at the facility at first, Charles has enjoyed an ever-increasing quality of life thanks to his LTC Tree Long-Term Care Insurance plan.

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Re-examine and Re-balance: Retirement Investing and Your Taxes

No one likes taxes, but everyone has to pay them at some point. Income and investment tax is the most burdensome because it takes away money you’ve rightfully earned. About the only way to mitigate the damage is to do some kind of tax planning. Even if you live off of investment income, you can still manage your tax bill. The trick is to start early, re-examine your financial situation every year, and re-balance investments as needed. 


Diversification is usually something you hear when it comes to investments, but tax diversification can also be a decent idea. If you have all of your money wrapped up into a traditional IRA or 401(k), you’re going to pay income tax on all of the money inside of the account eventually. 

With traditional accounts, you must start taking money at age 70 1/2. If you don’t, there’s a hefty 50 percent penalty on money you should have taken but did not. The IRS requires you to take a minimum withdrawal amount (called a “required minimum distribution”) based on your life expectancy. 

Converting some or all of your pretax money to other accounts might make sense. If you have the option to convert to a Roth IRA, for example, consider doing so – especially if you think that tax rates will climb in the future. 

Even if tax rates remain the same, it could still make sense to convert. You’ll pay the same amount in tax if rates remain flat regardless of which account you’re invested in, though an after-tax account allows you to hedge against higher taxes in the future. 

Finally, a fully taxable account removes you from the game of tax hedging altogether. It’s risky, but only if you don’t plan on using common stocks or long-term investments not subject to income tax. 

Allocate Assets Wisely 

Sometimes, the best move is to simply buy basic common stocks. Why? Common stocks are subject to long-term capital gains rates which are relatively low compared to income tax rates. While you do still pay tax on the money, you have more control over when you pay the tax and the future is a little more certain since you’re not relying on the government to give you a perpetual pass on taxes with a Roth IRA. 

Additionally, you don’t have to follow complicated retirement plan rules. All you have to do is hire someone to help you pick a good investment. 

Re-balance The Taxation of Accounts 

This can get tricky. if you’ve kept all of your money in a traditional IRA, there’s only one way out – pay tax. However, if you’ve remained relatively diversified, there’s a lot you can do to slosh funds around and keep a defensive tax position. 

For example, you can shift taxable gains from stocks into your Roth IRA indirectly. A simple way to do this would be to contribute more money from your paycheck than usual to your Roth. Then, offset the decrease in income by taking profits from your taxable stock. Over time, you have the opportunity to recover the capital gains tax and possibly the additional income tax paid for the contribution. Of course, this can get a little messy at tax time, so it’s probably best to hire a tax professional and file taxes online so that you minimize the paperwork involved. 

Use Tax-Free Investments 

Using tax-free municipal bonds is one way to get around paying tax on investment gains, and you don’t even need a tax-deferred investment account. You can use a regular taxable account. Most muni bonds pay reliably and are a simple way to hedge against rising taxes without adopting fancy or complicated tax planning schemes. 

Jeremy S is a personal finance consultant. He likes to keep his clients up to speed with the latest money saving developments.