Your 6-Step Guide to Making a Retirement Budget
Planning budgets for your retirement life is one of the smartest moves you could give yourself for stress-free retirement life. It gives you immense freedom and happiness far away from depending on anybody. When you plan, you need to consider inflation, interest rates, your investments, taxes, expenditure and part-time earnings.
You can plan your current budget and plan for a stress-free retirement. The following section gives you step by step guide to plan your retirement budget.
To do your planning, you need to note down your income, expenses and examine your savings you are left at the end. You can plan by noting down all your income and expenses as in the form of a financial statement on any white paper, notepad or any free budget planning worksheet. It can be any tool that helps you to easily organize your incomes, expenses, make calculations, and changes to your entries at any time down the line. When completed, this plan gives you a big picture of your plan and action items.
1. Calculate Your Monthly Income
First, you need to calculate all your current monthly income. List all your income without leaving the extra income, income from rental, online jobs, income from part-time service and jobs and any other income that you get. You can just add up all your income per month with income and this forms your income section.
2. Find All Your Fixed Monthly Expenses
Get a list of all your monthly fixed expenses. This is also known as non-discretionary expenses which include fixed expenses you need to pay month after month. It includes debt payments, house rent, gas, water bills, groceries, car loan repayment, student loan and other fixed payments that you pay every month. If you are not sure of how to get these fixed payments, you can view payments in your card statements for a few months to recollect this list.
3. Set Your Retirement Budget Goals
You need to plan how much you would need on retirement when your regular paycheck stops and you need funds to meet the expenses. For example, as per the 70% rule of thumb, you need $700 dollars per month during retirement for every $1000 you spend now. For example, if your current monthly income is $5,000, you need at least $3,500 per month during retirement life to live in the same lifestyle you live now. At retirement, if your pension fetches you $1,500 per month, you need $2,000 to be saved monthly.
6. Implement And Adjust Budgets
Once you have a perfect plan laid out, you need to implement it. You can discuss with your family, make a periodic check on the goals and monitor it closely. You can make changes as demanded by time and ensure to follow it to achieve your stress-free retirement budget.
When you plan your retirement budget using the above guidelines, it gives you a solid, structured plan and action items you need to know in order to enjoy a peaceful, stress-free retirement life. With financial stability in the retirement period also gives you peace of mind and ability to spend on necessities, control your unnecessary expenses and lead a more balanced life when you are earning your income. This guide helps you to create such a plan to have a clear vision with your actions and goals for a retirement budget.
