The high cost of retirement is something we cannot escape. As a retiree, you will be limited to your retirement savings and resources for everything that requires money. Some expenses you easily handled while you were working may become more challenging. We encourage your to have a stable personal budget as a retiree. With a weekly or monthly budget, you will find it easier to monitor your income and expenses.
What you need to know about the high cost of retirement
Let us examine some of the high costs that retirees face.
A good chunk of the high cost of retirement can be seen in the food budget. This will be a large sum of your expense every year. This expenditure can be broken down into costs of eating at home or dining out. It is much less expensive of course to eat at home. Of course lets face it, we all enjoy a good time eating out once in awhile. One thing I find is that I really enjoy my food at home because I am clear on the quality of the food and what goes into the meal. But a good meal out is fun too, don’t deprive yourself.
• Housing costs.
Retirees in the U.S spend a large amount every year on housing cost. The main costs include things lke rents, utilities, mortgages, property taxes, maintenance, insurance.
• Health care
Costs on health care increase in retirement due to aging related health care needs. Therefore, the high cost of retirement is truly reflected in health care costs. The truth is that, a large portion of the money you will spend during retirement will be on health related issues.
• Transportation costs
Transportation costs will decline during retirement mostly because there is less work travel. You may even want to sell your cars, or at least one of them, and use the public transportation instead. If you still maintain your car, you will have the related expenses to cover. Whether you are using your car or public bus as a means of transportation, you will see a reduction in costs on transportation.
During your working years, there were likely certain things you loved doing but couldn’t afford due to shortage of time. Now that you have retired, time is available to pursue them. You may spend more pursuing your hobbies. If possible, it is a good idea to buy the expensive equipment you may need for your hobbies before you retire.
Its important to keep entertainment in your budget. Now we have more free time and can pursue more entertainment options. Now is a great time to enjoy the arts more, join clubs, or even pursue hobbies you never had the time to consider before. Be sure to budget this into so the costs don’t sneak up and bite you.
Now is also a great time to spent time and money on developing yourself. You can do this through training classes, acquiring new skills, and other personal development opportunities.
While the high cost of retirement is something we all need to keep in mind, we all know that retirement doesn’t mean the end of expenses. Rather its simply a change in income and expenses. You may be more limited, but you have lots of opportunities to create a budget that works for you and still live a lifestyle that is enjoyable.
If you take the time to sit down and create a personal budget, it will go a long way toward reducing costs while still living to the fullest during your golden years.
Please share ways you have learned to take advantage of your retirement funds through your budget in the comments below. I’d love to hear your ideas.