It is always good practice to budget to ensure you don’t live beyond your means – never more important than when retiring. We endorse careful examination of expenditure when approaching or planning for retirement. Don’t just consider regular expenditure, a simple exercise by looking at the last 6 months bank statement to get to an average monthly amount, not forgetting capital costs such as the holidays you have planned, hobbies you’ve always wanted to take up, any planned gifts to children or grandchildren, replacing a car every 5 years or so. There are so many things outside of normal expenditure that are so often not considered.
Think of how long you will have these costs. It is very likely expenditure in the first 10/15 years of retirement will be higher than the last 10/15 years (care home costs aside), due to better health and a curiosity to do more things such as travelling, holidays, hobbies, many of which reduce dramatically with age.
This is a very simple tip that will enhance retirement, remove unnecessary worries. Just take an hour or so to establish a breakdown of what money is spent on. Don’t be tied to it but regularly review to ensure there is no overspending but more importantly under spending.