Getting ready to retire

Transitioning from working life to retirement takes careful financial planning and decision-making – give yourself plenty of time to prepare. Here are some things you can do ahead of time.

  • Convert your savings to income: You’ve spent years saving your money for retirement, but before you retire you need to select the best way to convert your savings into an income.
  • Pay off your debts: Pay off your debts as soon as you can – ideally before you retire. To help you pay the debt off faster, make sure you are paying the lowest interest rate you can get.
  • Calculate your monthly income: Estimate how much monthly income you’ll receive from your savings, government benefits and any pensions.
  • Make a budget: Figure out how much you’ll need to spend to make ends meet in retirement – then see if it matches your monthly income.
  • Review your insurance needs: As you get older, your insurance needs will likely change.
  • Review your will and powers of attorney: If you’re about to retire, your will might need to be changed or updated. Having a valid, up-to-date will is essential to ensuring your estate is distributed as you intend it and that your death does not create a legal and administrative burden to your family.

Increasing your Income in Retirement:

If your retirement savings aren’t enough to cover your expenses, you may need to find other sources of income. Here are some options to consider.

Sources of extra income:

  • Work part-time – Finding part-time work in retirement can provide extra income and help you stay engaged and active i.e. if you have key professional skills, you could be invited to be on boards of schools, companies etc., teach part-time, develop the spirit of volunteerism.
  • Rent out part of your home – Put your house to work for you by renting out a room or sharing your home with a friend instead of living alone. Just remember that you will pay tax on your rental income.
  • Moving to help your money grow further -Housing might be your biggest cost when you retire, even if you’ve paid off your mortgage. Moving to a less expensive home or region could help you stretch your retirement shillings.
  • Sell and downsize – Selling your home and moving to a smaller place can reduce your living costs, including electricity and other costs associated with maintaining a home
  • Move to a less expensive town or district – Living in a big city can cost you more than living in a town or smaller city (a home in Kampala costs a lot more than one in Hoima, for example).

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