What happens to family budgeting when your kids are all grown up?
Unravel the secrets of how to budget your money properly to suit the changes in your life.
As you grow older and the prospect of retirement comes closer, you will eventually notice a change in your family budgeting needs. To ring the changes, let’s take a peek at your budget and compare your current spending to what you anticipate you’ll need during retirement.
Hopefully you’ve been putting your money into savings and investments over the years, accumulating a nest egg. For many, the change from accumulation to spending can be daunting, so speak with your insurance agent and consult with your financial planner about the best way to receive funds. Would monthly payments work better for you, or do you wish to receive a lump sum?
When choosing your pension’s income stream, consider that your retirement budget will probably be different from your current budget. Your expenses are different when you get older. For example, you may no longer be paying for child care, but you might find that more of your money will be spent on health care. Even if you’re relatively healthy, you’re likely to need glasses, regular medical checkups, and more dental care than before. So you should make sure that your healthcare and disability insurance meets your anticipate
Some of Your Expenses Will Disappear
While a retired person’s income tends to be smaller than his working salary, the good news is that your retirement expenses may also be less than your current budget.
During retirement some of your previous “fixed expenses” may disappear. Chances are that you’ve paid off your mortgage by now, so that monthly expense disappears from your budget. And, if your house seems too large now that the kids have moved out, consider downsizing and living off some of the profits. A smaller house/apartment translates into smaller expenses and more money in your pocket.
Hopefully you have also finished with other debts that played a large part of your budget, such as student loans or a car loan. You may well have finished marrying off your children, and you can now sit back and watch your brood raise the next generation.
Fix your retirement expenses to meet your retirement stream of income. For some more great ideas on how to adapt and create more changes in budget, read Hidden Financial Strategies for Planning a Happy Retirement.
Your changing retirement lifestyle should be reflected in a new budget. Plan carefully.
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.