Ah, retirement. The vacation you have been waiting for. No work, no stress, just life in its simplest form. Well, that’s what you think, anyway. Because retirement, no matter how exciting, will still cost you in the end. Save up for retirement by planning for the following expenses.
Housing is a significant expense you need to prepare for before retirement. Settle your mortgage three to four years before retiring so installments won’t be a worry anymore. Paying for mortgage ahead of time also allows you to save up for other housing costs like upkeep and repairs.
A company that provides financial planning for retirement, Shoreline Financial Advisors says that healthcare is a necessary expense for all retirees. One of the biggest costs involved is insurance followed by prescription drugs. If you are planning to settle in a nursing home soon, include an estimate in your financial plan as well.
People spend around $800 to $1000 for groceries every month. This figure, however, includes non-food items such as toiletries and household supplies. If you are the kind that likes eating out, you may need to increase your food and beverage allowance. Be wise and consider pantry management.
Do you drive a lot? Then you need to save up for vehicle maintenance. Set aside some money for public transportation as well. If you have extra cash, you can also invest on a bike or scooter that will take you to nearby places for an inexpensive price.
Taxes will consume a small part of your savings during retirement. Property tax is not part of it, but the government will require you to pay a minimal amount for IRA withdrawals and 401 plans. Ask your lawyer about this to determine the exact amount you need to prepare for.
Retirement is all about enjoying life so better save up for entertainment and travel costs. Plan your activities and think about your dream travel destination ahead of time. Consider travel packages and entertainment discounts for seniors.
When saving up for retirement, it is wise to work with a financial planner and lawyer. Knowing how much you can save and will spend prepares you for the long retirement run.