Just like in your working life, you’re going to need a clear sense of your spending when it comes to your golden years. But unlike when you’re employed, there won’t be a steady career income to fall back on if you fail to budget properly. So whether you’ve just begun planning for retirement, or are 5 years away from hanging up your worker hat, you should know how to budget for retirement.
Here are some points to consider:
Ignore the rules of thumb
Unlike your normal budget, many of the pre-planned budgets for retirement will fall short because retirement often presents an incredibly unique set of monetary challenges. A prime example is that many advisors and information sources recommend budgeting for spending 70-80% of your pre-retirement income annually. While this can work for some, it doesn’t account for costs like traveling and having an active retirement, or healthcare expenditures.
Create a detailed budget
While it’s impossible to predict every expense that will pop up when figuring out how to budget for retirement, creating a financial roadmap of what expenses will continue in retirement and which will disappear can help you navigate your golden years smoothly. Even years ahead, you can predict and plan for big-ticket expenses like your home (and if you’ll downsize), and even figure out the cost of living in your retirement area.
Work with a trusted advisor
At LexION Capital, we help every client map out how to budget for retirement, and then create a unique investment plan to reach those goals and needs. If you’d like to learn more about our personalized retirement planning, don’t hesitate to contact us today.