How to Create a Budget for Retirement, Ep #25 

<p>People say that you spend 30% less in retirement—but is that true? What do you need to budget for retirement? In this episode of Retirement Made Easy, I look at data from my many clients throughout the US to help YOU get a clearer picture of your budget for retirement. If you’re questioning where your budget needs to be, don’t miss this one!</p> <h2>You will want to hear this episode if you are interested in...</h2> <ul> <li aria-level="1">[2:05] How to create a budget for retirement</li> <li aria-level="1">[7:12] Chapman University Survey of American Fears</li> <li aria-level="1">[8:34] What will you spend in retirement?</li> <li aria-level="1">[9:53] What expenses will change?</li> </ul> <h2>Ignore the “rule of the thumb” </h2> <p>The rule of thumb says you’ll spend 30% less in retirement than when you were working. My advice? <em>Do not operate on a rule of thumb</em>. Instead, operate based on your own goals. I believe everyone is a snowflake. Everyone’s families, financial situations, and goals are different. Some retirees want to golf every day of the week. Others don’t even like golfing. So what do you do to determine an accurate budget for retirement? </p> <p>One thing you <em>can</em> do is look at the year leading up to retirement to see what you’re spending and the lifestyle you’re accustomed to. Look at your take-home pay. What is your net monthly income? You want the same lifestyle you’re accustomed to, right? If you’re used to living on $6,000 a month, wouldn’t you want to continue that? But we take it a step further.</p> <p>You need to ask what expenses will exist in retirement that didn’t exist prior. Increasing costs of health insurance might be an expense you need to account for. If you want to travel more, that costs more. If you want to eat out more, you have to account for that. I have one client that has an expensive hobby: flying planes. These people will spend more in retirement than they did working! </p> <p>The hard truth is that $6,000 a month may not be enough to afford the retireme