What Costs to Include When Saving for Retirement
- October 3, 2014
Although you may not be retiring soon, it does not mean that you shouldn’t start budgeting or thinking about your retirement. Most of us have this idea that retirement is quite expensive, which it is, but just how expensive will it be? Below are some expenses that you will come across when you are retired and should begin to think about budgeting for according to your own personal needs.
The first and probably the most obvious is healthcare costs. Although some of your medical expenses are covered, you have to take into consideration extra treatments, prescriptions, and at some point you might need some extra help. We already know that going to see a doctor isn’t free and think about how often you might have to see a doctor as you get older.
The next expense is basic living expenses, unfortunately not all bills stop when you decide to retire. Hopefully by now your mortgage is paid off or significantly reduced and you don’t have to worry about creating a nest egg for yourself anymore. However, you still have to remember that you will paying for the other bills such as cable, heat, internet, phone and even food! Remember that you should always save more than you think because once you retire, you most likely don’t have any more money coming in.
What’s a retirement without having fun right? Other expenses that you will have to watch out for is your recreational expenses. If you want to travel, go on more adventures, or even live in another country these are things that you have to budget for. The best part of retiring is having the ability to do what you want, so don’t limit yourself to the bare minimum.
The final expense you should consider budgeting for are the ones that you won’t be able to plan for. Unanticipated expenses can be a financial burden for most people that do not plan for them. Always keep in mind that life isn’t always fair and some things can be quite costly, do your best to be completely prepared when something like this does happen so that you can continue with your retirement happily.
When it comes to retirement, some of us may find it difficult to save for because it seems so far into the future. The best thing you can do is create a budget for how much you would like for retirement which includes all the expenses above. The next thing is to implement this into your current budget and see where you can make adjustments to create more savings into your retirement fund, chances are you won’t regret it.