Creating a Retirement Budget
Creating a Retirement Budget
Many people are used to living by the guidelines of a budget. However, there may have been times where you could work overtime to earn some extra income, or even count on bonuses from your company at the end of the year. When it comes to retirement, much of your income stream will be fixed. This means your budget is crucial to living within your means. Don’t let expenses you didn’t plan for throw you off track. Plan for your finances today and save yourself the stress in the future.
Housing
This can be a big decision for many people. Will you decide to stay in your current home, downsize to a smaller home, or move into a retirement community? There are many options to choose from. Maybe you want to move closer to your kids and grandchildren. Or maybe your planning to stay in your home, but also want to renovate to make it more senior friendly. These payments, plus typical utility costs, are something you should account for when planning your retirement budget.
Healthcare
Many people rely on their employer for healthcare coverage. When you retire, you may need to look for other resources to cover this until Medicare can kick in at age 65. Look into other options to cover healthcare, dental, and vision to research how much you may need to include in your budget each month. If you’re currently taking certain medications, be sure to look into how much insurance will be able to cover and estimate those costs into your budget as well.
Know Your Annual Costs
Property taxes, auto registration, and other annual costs can sometimes sneak up on you. If you’re already aware of how much these costs are, you should be able to set money aside each month for them. There also may be other fun annual expenses you need to budget for such as family vacations, birthdays, and holidays. Be sure to calculate these into your budget to avoid letting these periodic costs throw you off.
Emergency Savings
It’s still important to continue your emergency savings. There are many things outside of your control that can result in sudden, unplanned costs. For instance, you may outlive your washer and dryer, or maybe you’ll need a new computer down the line. Don’t let expenses like these break the bank. Be sure to include your emergency savings into your retirement budget.
Cut Out Unnecessary Spending
Look at some things that are currently in your budget (or in your spending) and see where you can cut back. Things like morning coffees on the way to work or lunches out could be cut out. Cooking at home could be a new hobby to perfect one dish you’ve loved for years. You could learn to make an amazing latte with whimsical foam art. Eating out could be saved for special occasions like holidays or visiting family and friends. Maybe there are other monthly expenses you can cut out completely. If you aren’t using certain streaming services or subscriptions, go ahead and cancel them. By taking a look at your current spending you can evaluate where you can save.
Supplement Your Retirement with an Annuity
By including a fixed rate annuity into your retirement planning, you can create more income stream for your future budget. Discover how much you could grow your nest egg with a fixed rate annuity by using our annuity calculator. If you feel an annuity might be right for you, contact us today.