So chances are you don’t want to work forever. Maybe you have your heart set on traveling, volunteering or just spending more time catching up with the people and activities you love. Sounds awesome, and we want to help make that happen for you. Here are some tips on setting a budget for retirement!
First, make an assessment of your current financial situation. We suggest gathering your last 12 months of bank account statements, credit card statements, and your last two pay stubs. This will give you an idea of how much you’ve spent compared to how much you make.
WHAT ARE YOUR FIXED EXPENSES?
What are your HHSTF’s (sorry, we couldn’t come up with a cute acronym) per month – Health, Home, Safety, Transportation and Food expenses? These are the essentials and you should make sure each is covered 100% before focusing on anything else.
WHAT ARE YOUR FUN EXPENSES?
What do you like to do for fun? Maybe golf? Great! Figure out how much your hobbies cost, while also considering how much more you may be doing them now that you’re free Monday-Friday from 9 am-5 pm. Also, don’t just consider the hobbies you currently have – what hobbies do you want to take up now that you have more free time?
TOTAL IT UP!
Add your fixed expenses and fun expenses separately. This is your total expenditure. Now, divide your fixed expenses by the total. Is this percentage more or less than what you thought? Consider lifestyle changes to lower either your fixed or fun expenses. Remember, you want to have fun in retirement, but going without your HHSTF’s is no fun, either.
Need help budgeting and planning for the future? Contact us and set up a time to talk to one of our financial advisors!