How can I manage cash flow in retirement?

How can I manage cash flow in retirement?

Retirement does change cash flows; for instance, you no more receive the monthly pay cheque, and instead you may receive a monthly pension, which may be not as much as your pay cheque. The spending patterns also may change in retirement, reflecting both your new lifestyle and shifting financial responsibilities. To manage cash flows efficiently in this phase of your life, consider a bucket approach for different short- and longer-term needs, such as living expenses, short-term goals and emergencies. Living expenses: You’ll want to have a portion of your savings easily accessible and liquid for paying everyday living expenses, such as groceries and utility bills. For these needs, you may want to consider keeping cash in the bank. Short-term savings goals: If you have short-term savings goals, such as car maintenance or a short vacation, you may want to consider investing in low risk vehicles, such as bank deposits or short-term debt funds, with maturities that correspond to the date you need the money. Emergencies: Keep cash in hand to meet emergencies like hospital trips, repair at home or unexpected expenses on a trip.

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