Budgeting in Retirement
While the basic principles of budgeting remain the same from first allowance to first paycheck, there are a couple of changes in retirement to keep in mind — your income and expenses.
Your cash flow does not stop in retirement, but it will come in different forms. Most income will come from pensions, 401(k) accounts and IRAs. Social Security, non-retirement investments, and part-time jobs can also supplement your income.
You’ll no longer need to budget for business clothes or commuting costs. Some of the benefits you were granted as an employee are no longer there and you must fund them yourself. Medical care is one of the biggest costs you could face in post-retirement years.
Additional Questions to Consider:
- Am I living where I want? You are no longer tied to a geographic location because of a job. Is there a climate that better suits you? Do you want to be near children or grandchildren? Would moving to a less expensive area ease financial burdens during retirement?
- Can I delay taking Social Security benefits? You can begin taking Social Security benefits as early as age 62, but you are not required to take them until you reach age 70. By delaying, you can add to your benefit. Go to www.ssa.gov and learn what a delay might add.
- Do I want to continue working? While many are continuing to work after retirement your decision to do so could affect more than your earned income. Your Social Security benefits will be reduced if your earnings exceed certain limits.
- Can I reduce expenses? By planning ahead, you can significantly reduce your retirement expenses without changing your lifestyle. Consider, for example, adding to your monthly mortgage payment during the years you are working. This could mean no mortgage by the time you retire. For more ways to save in retirement talk to one of our financial advisors today.
- Am I meeting my insurance needs? If you haven’t already done so, take a look at your insurance needs. Do you have the right life insurance? Does your medical insurance carry over into retirement? Do you need a policy to supplement Medicare benefits? Should you be considering a long-term care policy? Click here to learn more about insurance options.
Need help with your retirement income plans or a review of your insurance coverage? Call us at 800-392-3009 to schedule an appointment or find a financial advisor near you.