top of page
Search

Are You Ready For 7 Saturdays In Retirement? You Spend More In Retirement.

  • Writer: Melissa
    Melissa
  • May 6, 2021
  • 3 min read

One of the most significant problems with most people’s retirement plans is that they do not account for changes in spending levels over the years. Most people with an intelligent plan will take into account inflationary adjustments, but is it really reasonable to think that your inflation-adjusted costs for property taxes, healthcare, income taxes and more will all remain the same? If you have ever opened an old budget file on your computer that you created years ago, you may be well aware that budgets can change very dramatically from year to year. With this in mind, the best planning efforts for your later years in life will include increasing rather than decreasing levels of expenses.


The Issue of Healthcare Expenses

If you are like most adults who are preparing to retire, your planning efforts may include most of your medical expenses being paid for through Medicare. However, the media is filled with stories about pending changes to Medicare coverage. In addition, the reality is that most seniors tend to need more rather than fewer health services as they get older. The bottom line is that your medical expenses can increase rather dramatically throughout your retirement years, and your financial plan needs to take this into account. Without properly planning for what may equate to several hundred dollars or more per month in additional expenses, there is a very real chance that your budget may fall short of meeting your needs.


Preparing for Tax Changes

Taxes are also a great unknown when you are preparing to retire. This includes your property taxes as well as income taxes. These tax rates can vary from year to year, and it may seem more likely that they will increase rather than decrease in the future. Even if your incoming cashflow remains steady, you may still pay a higher percentage in taxes. This can detract from the overall amount of money you have available to spend when you are retired. In some cases, this may equate to several hundred dollars or more less per month.


Increased Living Expenses

Some people believe that living expenses will naturally decline as you get older. For example, you may plan to spend your first few years out of the workforce on the golf course. While golfing can be expensive, your health will eventually decline and you may find yourself golfing less frequently. The thought of spending your days at home in front of the TV or curled up with a good book sounds very affordable. However, you may need in-home care at some point, cleaning or landscaping services to care for your home and more. You may even need to sell the home and move into an assisted living facility. These long-term care facilities can cost a modest fortune. You can see that these increased living expenses are not simply inflationary adjustments. They add new expenses to the budget.


How to Create a More Realistic Budget

If you are serious about being financially prepared in retirement, you need to create a budget that is as realistic as possible. One smart idea is to consider living more frugally during your first few years, and this can help you to stretch your funds for a longer period of time. Remember that funds that you do not take out of your account immediately will have more time to grow over the years. You may also want to create a separate budget for every five-year period of your life rather than one budget that is supposed to cover a 20 or 30-year span. If you determine that you will fall short of meeting your goals when you take this step, consider working at a part-time job for your first few years away from the main workforce. While this may not be ideal, you will thank yourself years from now when you are free of financial concerns.

 
 
 

Comments


Follow

  • LinkedIn
  • facebook

Contact

Office: 240-403-2677

Address

9701 Apollo Drive, Suite 443
Upper Marlboro, MD 20774

We at EViE Financial are committed to promoting fairness, kindness, and equality in everyt
We at EViE Financial are committed to promoting fairness, kindness, and equality in everything we do. We stand strong with our LGBTQIA+ community members and allies.

©2022 by EViE Financial Group.

This website is for informational purposes only and does not constitute investment advice nor a solicitation to buy or sell any security or engage in a particular investment strategy. EViE Financial Group provides advisory services through Rossby Financial LLC, a Registered Investment Adviser with the U.S. Securities and Exchange Commission. Information contained herein is provided by sources deemed to be reliable; however, accuracy and completeness cannot be guaranteed. All investing involves risk, including the possible loss of principal. Results are not guaranteed, as past performance does not indicate future results. Rossby Financial LLC and its affiliates do not provide tax or legal advice. 

Disclosures: https://www.rossbyfinancial.com/disclosure

 

Securities offered by Registered Representatives through Private Client Services, Member FINRA/ SIPC. Advisory products and services offered by Investment Advisory Representatives through Rossby Financial LLC, a Registered Investment Advisor. EViE Financial Group, Rossby Financial, LLC, and Private Client Services are unaffiliated entities. EViE Financial, Rossby Financial and Private Client Services do not offer tax or legal advice. Please consult a professional regarding your specific situation.

Our advisors are securities registered in the following states: AZ, CT, DC, FL, GA, HI, ID, IN, MD, MI, NC, NY, PA, SC, VA, and WI
Our advisors offer advisory products in the following states: AZ, CA, CO, CT, DC, FL, GA, HI, ID, IL, IN, MA, MD, MI, MN, NC, NJ, NY, OH, PA, SC, TN, TX, VA, and WA

bottom of page