After a lifetime of working, it is finally time to retire. You have saved regularly, bought an annuity, maybe got a company pension; you are looking forward to enjoying yourself in your senior years.

When you first retire, you will probably be thinking of all the things that you have always wanted to do but never had the time or money for; the world cruise, landscaping the garden, buying a holiday home. Before you splash out too much, there are a few things you need to bear in mind.

You do not know how long your retirement will last; with increasing life expectancy, it could be twenty or thirty years, possibly more. During that time your income will only increase at best by the rate of inflation; there won't be any pay rises. Should prices rise above the rate of inflation, your annuity will be worth less.

To make your money last, avoid drawing on your savings in the early years of retirement. Consider having two savings accounts; one for extras like hobbies and holidays, and the other as a nest egg. Set yourself a budget for non-essential items.

When you retire, have your house surveyed. If it seems likely that you will need major work such as a new roof or rewiring in the foreseeable future, get it done now; the likelihood is that any work you have done will last your lifetime. Consider it an investment and withdraw some savings if necessary.

Consider releasing capital by selling your house and down-sizing; if you decide to buy somewhere in one of the many new developments for Senior Citizens, remember that there is usually an annual service charge that you will need to take into consideration.

By saving regularly whilst employed and being careful over what you spend when you retire, you should be able to make your money last.

Don't live like a lord, end up as a pauper.

Learn more about this author, Celia Craske.
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