One of the most integral components to retirement planning concerns managing one's cash flow, according to one expert.
Van Sievers, a CPA and financial planner, wrote for the Montgomery Advertiser that retirees must strike a balance between income and expenses every day, and once they're out of work and no longer bringing in a significant income, that balance becomes all the more delicate. Several factors can upset that equilibrium, including interest rate fluctuations that sap savings plans, new tax regulations, inflation and rising healthcare costs, or the death of a dependent. As a result, monitoring one's cash flow and protecting it with a life insurance policy becomes all the more vital, said Sievers.
He recommended retirees assemble and track key information regarding their finances, including an up-to-date net worth statement that tracks assets, debt and cash reserves. Additionally, retirees ought to itemize their monthly budget down to the last detail. Updating and keeping track of this data is the first step in any worthwhile retirement plan, he said.
A true assessment of one's expenses and income can also give retirees a better idea of how much life insurance to purchase when it comes time to look for a policy, experts say.