{"id":441,"date":"2022-08-24T13:56:25","date_gmt":"2022-08-24T17:56:25","guid":{"rendered":"https:\/\/blog.specialtylifeinsurance.ca\/?p=441"},"modified":"2024-07-11T10:27:43","modified_gmt":"2024-07-11T10:27:43","slug":"budgeting-for-retirement-how-to-stretch-your-retirement-savings","status":"publish","type":"post","link":"https:\/\/cms2.dmatrixsoft.com\/sli-blog\/2022\/08\/24\/budgeting-for-retirement-how-to-stretch-your-retirement-savings\/","title":{"rendered":"Budgeting for Retirement: How to Stretch Your Retirement Savings"},"content":{"rendered":"

Budgeting in retirement is crucial, especially when you live on a fixed income. It doesn't matter if you retire early or you have a late retirement. With careful retirement planning, you make your nest egg last as long as you need it to.<\/strong><\/p>\n

In this article, we discuss how to stretch your retirement savings in order to make them last longer. We cover budgeting strategies and how to make your money work for you.<\/strong><\/p>\n

<\/h2>\n

Budgeting Tips to Get the Most Out of Your Retirement<\/h2>\n

Making a budget is an important step to ensure your retirement savings last. In short, when you have a budget and spending plan, you can better track and assess the things you need to pay for in life.<\/p>\n

With that said, before we delve into more specific money saving tips, let\u2019s explore how to set up your budget in the first place!<\/p>\n

\"Before<\/p>\n

How Do You Start Budgeting for Retirement in Canada?<\/h3>\n

The first step to take when budgeting for retirement is to estimate your retirement income. This includes all sources of income, such as pensions, government benefits, and investments. Once you know how much income you'll have each month, you can start making a budget.<\/p>\n

How Much Retirement Income Do You Need?<\/h3>\n

There's no one-size-fits-all answer to this question. The amount you need each month depends on factors like your lifestyle, health, tax-costs, and where you live. However, as a general rule of thumb, you can expect to need about 70% of your pre-retirement income.<\/p>\n

\"If<\/p>\n

How Do You Calculate Retirement Expenses?<\/h3>\n

Once you have an estimate for your retirement income, you can estimate your retirement expenses.<\/p>\n

You'll need to account for out-of-pocket costs like housing, food, health care, tax payments, as well as investment or transportation expenses. Remember to include leisure and entertainment expenses. And, of course, you'll need to account for unexpected expenses.<\/p>\n

What is the Biggest Expense in Retirement?<\/h4>\n

The biggest expense in retirement is often housing. This includes costs like mortgage or rent payments, property taxes, and maintenance. Other significant expenses include food, transportation, and health care.<\/p>\n

\"Traveling<\/p>\n

What Expenses Increase When You Retire?<\/h4>\n

The monthly cost of health insurance premiums often increase in retirement. This is because you'll likely need to spend more of your income on health care than young people. Knowing your family health history<\/a> is one of the best ways to guess what you might need to pay down the road.<\/p>\n

Another common expense that increases in retirement is travel. So long as\u00a0you have the income, spending time in new places around the world is great personal care, as it helps you feel more fulfilled in life.<\/p>\n

What Expenses Decrease During Retirement?<\/h4>\n

There are a few expenses that tend to decrease during retirement. One is work-related expenses, such as commuting costs, business attire, and income tax. Another is child and family care related expenses, such as education, or your child's wedding.<\/p>\n

\"You<\/p>\n

How Do I Retire on a Small Retirement Budget?<\/h2>\n

If you're on a small budget, there are a few things you can do to reduce your monthly expenses and extend your retirement savings.<\/p>\n

Here are some tips on how to budget your retirement savings:<\/strong><\/p>\n

1. Review Your Monthly Expenses & Make Changes Where Needed<\/h3>\n

You'll want to take a close look at your expenses and make changes where necessary. This may include cutting back on non-essential expenses, such as dining out or travel. It's also important to make sure you are not overspending on housing costs.<\/p>\n

In short, you'll want to ask yourself, \"Does this help me achieve my financial goals?\" If the answer is no, it may not be necessary.<\/p>\n

\"You<\/p>\n

2. Cut Spending: Get More Budgeting Bang from Your Retirement Bucks<\/h3>\n

One of the best ways to make your retirement savings last longer is to live below your means. This means spending less than you earn from your pension and saving the difference. When you live frugally, you have more money to live your best possible retirement life.<\/p>\n

For seniors who've fully paid their mortgage, downsizing to a smaller dwelling can save a lot of money on things like property taxes, utilities, and maintenance. Since you don't need to go to work, try relocating to a walkable or bikeable neighbourhood. You won't have car payments, and you'll get exercise while meeting people in your community.<\/p>\n

\"You<\/p>\n

3. Give Your Future Certainty: Get a Excelsior Plan<\/h3>\n

Excelsior life insurance can help your loved ones cover the cost of final expenses, like your funeral and outstanding medical bills. It is a really good idea to get one of these personal insurance plans, especially if you have debt in your retirement years.<\/p>\n

That's because these plans ensure your spouse and family won't inherit your debt (or its\u00a0rising interest rates<\/a>) in order to pay for your final expenses. Your benefits could even be used to make charitable donations on your behalf!<\/p>\n

At the end of the day, life insurance gives your future the certainty needed to fully enjoy retirement life.<\/p>\n