So many people do not consider the importance of making a retirement budget before retiring.
In fact, based on a survey performed by GoBankingRates, 42 percent of Americans have less than $10,000 saved for their retirement fund.
Needless to say, that is not nearly enough to cover even one year’s worth of expenses.
Below are some tips to help you create your retirement budget now so that you are secured for the future.
Create a Budget
Look at your current spending habits to estimate your potential budget during retirement.
We recommend dividing your budget into two sections: fixed and variable.
Fixed expenses are expenses such as groceries, rent, and utilities that you pay each month.
Variable expenses are expenses that fluctuate over time such as medical costs, or entertainment.
Anticipate how certain costs may change over time.
For example, if you have children, it is safe to assume that any financial costs you incur due to their care will be nonexistent by the time you are of retirement age.
Understand Potential Retirement Income
There are many income sources that you may be entitled to during retirement.
These sources include your 401(k), and IRA, pension plan, Social Security, etc.
Your financial planner can help you to evaluate the potential income to factor into your budgeting analysis.
Anticipate Your Lifestyle Goals
Many newly retired individuals tend to spend more money earlier in their retirement.
In fact, the first two years generally see the highest spending due to the more active nature of individuals during this time where many take the opportunity to travel, take on a new hobby, or purchase a vacation home.
All of these factors should be considered when drafting a potential budget for your retirement future.
Interested in Creating a Retirement Budget?
If you are interested in planning for your retirement but don’t know where to start, Argent Bridge is here to help.Contact our office online or call us at (833) 568-4900 today to speak to one of our experienced advisors.