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How to Make a Retirement Budget

Available through CUSO Financial Services, L.P.

 

Spending money during retirement could be a challenge because most retirees have little to no income outside of their savings. To ensure that your nest egg isn’t depleted too quickly, it’s essential to include a retirement-focused budget as part of your planning process.

Keep in mind this process isn’t about depriving yourself during your golden years. It’s about having the peace of mind to spend money on the things you want and reducing stress related to the fear of running out of money.

Determine Your Income

Start by determining your retirement income by totaling up all sources of income, including pensions, Social Security, and retirement savings accounts like 401ks, IRAs, annuities, etc. Next, write down how much you plan to take out each month. Remember to consider that you may not need to withdraw from some of your retirement accounts right away, including Social Security*.

List Current Expenses

Now that you’ve determined your planned monthly income, you’ll need to determine how much you will spend each month by reviewing your previous expenses. As you make your list, make sure to label each expense as either nonessential (anything you don’t need to get by in life) or essential (rent or mortgage payments, household bills, and groceries).

The total of your essential expenses is the bare minimum you’ll need to spend each month while in retirement. Make sure to include flexibility for expenses that could fluctuate throughout the year, like an electric bill.

Consider New Expenses

By heading into retirement, you could expect some changes to your expenses. One of the most significant changes for retirees is healthcare costs. Depending on your situation, your out-of-pocket expenses could increase due to gaps in coverage, having to cover some or all of your healthcare, or other medical reasons.

The Fun Part

Make a list of the things, big and small, that make life enjoyable. This could include entertainment like dinner or going to the theater, or larger expenses like traveling. While in retirement, you don’t want to deprive yourself of the joy life has to offer. Just make sure you plan your savings and spending so you don’t have to miss out.

Creating a retirement budget is similar to other budgeting processes, with the small adjustment of a few retirement-centric items to consider. For help with retirement income planning, contact Shanel Dubique, CFS** Financial Advisor at Shanel.Dubique@atriawealth.com.

*Consult your financial advisor or tax representative for more information.

**Non-deposit investment products and services are offered through CUSO Financial Services, L.P. (“CFS”), a registered broker-dealer (Member FINRA/SIPC) and SEC Registered Investment Advisor. Products offered through CFS: are not NCUA/NCUSIF or otherwise federally insured, are not guarantees or obligations of the credit union, and may involve investment risk, including possible loss of principal. Investment Representatives are registered through CFS. The Credit Union has contracted with CFS to make non-deposit investment products and services available to credit union members.

Before deciding whether to retain assets in an employer-sponsored plan or rollover to an IRA, an investor should consider various factors including, but not limited to: investment options, fees and expenses, services, withdrawal penalties, protection from creditors and legal judgments, required minimum distributions and possession of employer stock.

Check out our other budgeting resources below or visit our Achieve Platform to learn more about budgeting.

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