Preparing A Retirement Budget
You may have developed a viable retirement plan or are already reaping the benefits of having one, but whether you are in your pre-retirement years or in the midst of retirement, revisit your financial strategy. Re-evaluate your goals. Re-assess your needs. Take the time to look over your investments. Which areas can still be maximized? What can you do to strengthen your retirement portfolio? There is no such thing as a perfect retirement plan; there is always room for improvement.
When you previously prepared your retirement plan, many of your projections were just that - projections. You probably estimated your retirement expenditures, so compare those numbers with your expenses now. How accurate were you, or do you see a wide gap between your financial situation then and your circumstances now? How about your retirement cash flow? If you are married and are expecting to retire in a different year from your spouse, does your retirement plan offer some "buffers"? Between the ages of 55 and 70, income levels can fluctuate depending on when each spouse chooses to retire or is forced to retire, which spouse becomes eligible for what pension, and when they can access those pension funds.
Have health care costs exceeded your initial expectations? Do you foresee them increasing due to the current state of your health? Which health services are not covered by your company's pension plan? Are your employer's benefits enough for you to retire on? If not, did you provide a strong enough contingency plan to safeguard your assets during retirement? As previously discussed, most financial experts will advise you to consider a retirement income based on 60% to 80% of your pre-retirement income levels. Usually, 80% is the best and safest rule of thumb.
A retirement budget helps to put all your current expenses on paper for a clearer perspective on your financial situation. You can use the calculator below to help estimate your expenses.
Retirement Calculator
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