Making the Most of Your Money in Retirement

Knowing how to stretch a dollar during your retirement can mean the difference between living a comfortably and just squeaking by. You don't want to have all the time in the world with nothing better to do than just sit there and stare at the boob-tube because you haven't managed your money well.

Preparing for retirement is certainly important, but paying attention to your money and planning how best to utilize it doesn't end there. While you may never have felt there was time for dealing with your finances when you were still working, there's little excuse once you hit retirement. And failing to make the most of your money during your golden years can have brutal repercussions.

Prioritize

Prioritizing where your money will be going during your retirement isn't always easy. There will be certain "must haves" and then areas in which you might get a bit of leeway. A budget can help you pinpoint many of your costs, but there will be some areas you may have to prioritize.

Obviously items like healthcare and medical expenses, utilities, a mortgage payment, and similar costs will take precedent over miscellaneous spending. However, you will have to decide how you want to make use of the money you have left over once these costs are covered. Will you save it for an annual trip? Make use of it a little at a time by parceling it out on a monthly basis for weekend travel, dinners out, spending upon the grandkids, or hobbies? Maybe you won't need it for anything at the moment and can reinvest it temporarily, allowing it to continue to grow for future needs.

This is where prioritizing which activities are most important to you, as well as their associated costs, can help you make the most efficient use of your retirement income.

Don't Stop Working

While you may have stopped working a regular job, this doesn't mean you have to stop working all together. Your new job in retirement (unless you plan on working part-time) may be to act as CFO and financial analyst for your retirement nest egg. This doesn't necessarily mean that you should tackle all responsibilities regarding how your money is managed (i.e. investing in stocks, conducting various transactions, and similar money management responsibilities that might be better handled by an advisor, investment banker or broker). But where you once focused on learning and advancing yourself in a job or career of some sort, some or maybe all of that energy can be directed toward learning about, watching, and making decisions regarding your investments and income streams and how better to manage them.

Consider What You Need

Making the most of your money in retirement doesn't just stop with the major aspects of your income such as your retirement portfolio, savings accounts, and social security. Not to sound morbid here, but at this point in your life, you might want to consider what you'll really need as far as possessions go and for how long.

Maybe it's time (or you finally have time) to start looking around your home. Is all that stuff really necessary? Is your current house even necessary? Downsizing can make for a simpler, more efficient life, which in turn can be less costly. Downsizing can earn you money through resale, but maybe more importantly it can declutter your life, possibly allowing you to make more efficient and more effective decisions regarding your lifestyle and how your manage it.

Once you have eliminated some of the material items you've surrounded yourself with throughout the years, you might feel as if a weight has been lifted. This can also be a great way to find things that you may completely have forgotten about and keep from buying them anew. As we age we often lose track of things, and a regular clean up of our home can keep us from purchasing things we already have. Learning to live with less is also a great way to make the most of your money during retirement and put the money you do have toward the things that truly matter most to you.

Consult Family Before You Buy

As hard as it may be to admit, as we slip into our older years, we may not be as in tune as we once were with current trends, deals, technology, and the best buys for our money. When it comes to making sound money management decisions and strengthening our purchase power, our younger family members and friends may prove to be valuable resources in assisting us to get the best bang for our buck.

If nothing else, it probably won't hurt to ask their advice, and doing so doesn't necessarily mean you have to take it. However, you may find that getting a second or third opinion, especially when it comes to major purchases, investments, and travel plans, could end up helping you make your retirement money go a bit further.

More from this contributor:
Home Investment: One Man's Battle Against the Odds
Boom or Bust: Plight of the Baby Boomers
6 Ways to Keep Your Elderly Loved One's Money Safe

Disclaimer: The author is not a licensed financial professional. The information provided in this article is for informational purposes only and does not constitute legal or financial advice. For financial advice, readers should consult a licensed financial advisor. Any action taken by the reader due to the information provided in this article is solely at the reader's discretion.