A retirement budget is more difficult due to the fact that you must live on the income you have already accrued. After retirement, it might be necessary to cut personal spending. What are some ways you can accomplish this without feeling deprived? How can you be sure your money will last? How can you create residual income for retirement? If you don’t want to burden your children, well thought out budgeting is the way to go. There are certain expenses you will want to prepare for in your retired budget. I have recently joined the ranks of the retired. Here are the budgeting tips I have found to be the most helpful.
Pay down your debt. Get those credit cards paid off, or at least down to a dull roar. After retirement, use them only when absolutely necessary. You don’t want all your hard earned retirement money going into your banker’s pocket for interest fees. Personal spending should be considered as well. Plan your budget to avoid incurring further debt.
Shop for value and practicality. When it comes to personal spending, it’s OK to budget in a few luxuries here and there (if you can afford it). Just be sure to watch that bottom line. For the most part, your spending should be practical and necessary. Look for value and longevity in the products you purchase. For instance, it doesn’t hurt to have a reliable vehicle that will last you until you can no longer drive. A vehicle maintenance plan is always a good investment. You don’t, however, really need that sporty little red convertible.
Life and health insurance are a must. You don’t want to burden friends and family with financing your health care or your burial expenses. Leave room in your after retirement budget for life and health insurance. If you are a homeowner, keep insurance and taxes up to date on your home. Along with your retirement savings, your home should provide a cushion, rather than becoming a liability.
Money in the bank. Retirement without personal savings or some type of retirement fund is out of the question. Life is full of surprises. You never know what unexpected event will surface. Before you even consider leaving your place of employment, sit down and work the numbers. Take into account as many ‘what if’s’ as you can think of. You should also consider finding a way to generate residual income.
Creating residual income. The residual income I receive from online articles is a big part of my after retirement planning. You don’t have to be a writer to generate residual income. Stocks, bonds, savings, retirement plans and business investments can bring in a substantial residual income for retirement as well. Residual income can be used to feed your retirement account or provide extra money for personal spending. When it comes to budgeting for retirement, the more preparation you do, the less worry you will have later in life.