If you don't want to still be working after retirement, you have to plan with care. Don't let your new freedom fool you into thinking you can spend without any limits.

Make sure to use good financial strategies even before you reach your golden years. You can even build a debt budget spreadsheet if you have to.

If you are hoping to have a happy retirement, sit down already and take out your calculator, even if you still have a few years to go. During your working life, it is always important to budget and plan. However, when you are planning for your retirement, you need to sit down and plan even more thoroughly because you will probably be living mostly from your savings and pension plans rather than from earned income.

As any retirement blog will tell you, Retired woman doing yogaCredit: http://www.freedigitalphotos.net/images/view_photog.php?photogid=1499one of the pitfalls that many people fall into soon after going on pension is thinking that freedom from work equals freedom to spend money on everything they have ever wanted to do but never had the time for.  Even if attending classes, going on vacation, and redecorating the house is pleasurable, don’t spend indiscriminately without any consideration if you can afford it. Before you start to indulge in all of the things you have been waiting to do all these years, sit down and write them into your retirement plans. How much of your funds will be available for “fun” on top of your other needs?

 What are your other needs?

Everyone needs to pay the bills, but certain bills may increase in retirement.  Your home may end up costing more.  As you get older, your physical circumstances may change and you may need to adapt your home accordingly.  In addition, general maintenance costs may increase as you may need to hire help to do the repairs you once were able to do yourself.  And don’t forget the periodic repairs – your appliances may need to be repaired and/or replaced.   Where will the money come from? When you draw up your retirement plan, don’t forget to add in a column for home improvements.  While some people may take on a second mortgage, it generally is not good to take on extra debt on a fixed income. 

Don’t forget the cheese

If you are part of the “sandwich generation,” you may find yourself juggling your financial needs between your parents and children.   If you need to pay for your parents’ expenses, that should be a line item in your budget.   And if you have a special needs child, his welfare will also need a line in your budget.  If this child lives with you, you need to plan for when you will no longer be able to take care of him. Will he live with another relative or could he live in sheltered housing? Your retirement budget needs financial provisions for either or both of these options.

 These are just some of the aspects to be taken into account when making a retirement plan.  For more financial strategies of how to plan for retirement, consult your financial planner.


Disclaimer: This article is for educational purposes and is not a substitute for investment advice that takes into account each individual’s special position and needs. Past performance is no guarantee of future returns.