A Financial Safety Net for Retirement

Having a Satisfying Retirement without a budget is pretty much like jumping off a cliff without a parachute. You may survive but I wouldn't recommend it. I believe quite strongly that a budget is absolutely essential to a financially secure retirement lifestyle.

Whether you are already fully retired, working part time, or still a few years away from leaving your job, it is never too early to build a retirement budget. You may hate the idea of keeping track of what you spend. You may think you know what you income and outgo are. But until you put in on paper (or in a software program) you are playing with fire.

So, what goes into a budget? How different is a retirement budget? Are there categories that were important when you worked full time that can be dropped when you are retired? How do you plan for retirement?

To give you some idea what might belong in your post-work budget, I will use mine as a sample. Since your situation is likely to be different please just use this as a starting point.


Housing
Mortgage payments (I own my home but you may have monthly payments)
Real Estate Taxes and HOA fees
Home Owners Insurance
Utilities: electric, gas, water,  sewer/trash pickup
Home maintenance and repairs, pest control

Domestic
Food and household supplies
Internet, cable or satellite TV
Telephone
Decorations & furnishings
Yard service
house cleaning service

Personal
Clothing purchases
Dry Cleaning/Laundry
Entertainment
Dining Out
Auto: payments, gas, repairs, insurance, registration
Health insurance: premiums, uncovered expenses, co-pays
Health supplies: over-the-counter vitamins & medicines
Dental care: checkups, fillings, crowns, dentures, etc
Eyeglasses & hearing aids
haircuts & beauty salon

Miscellaneous
Gifts
Computer purchase, repair, software
Subscriptions, postage stamps
Charity donations
Vacations
Tax prep and accountant costs
Life insurance 

You may be surprised at all the categories I maintain. A budget after retirement isn't much different from one you used while working full time. It is quite easy to forget that a majority of expenses don't go away. The amount you decide to spend in each may change, but the actual number of categories is pretty much the same, retired or not. And, don't forget to plan for inflation in virtually every category.

Which categories did I overlook? Which ones would you delete or add?


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