Budgeting Tips for Retirement

Creating and thoughtfully managing a budget before you retire helps ensure you will have maximum resources available to support your post-work lifestyle. As you close in on retirement, your financial outlook changes. You’re moving from earning to spending, and your needs will likely change, too.

As of 2023, a fifth of American seniors were still actively working, and that number continues to grow. In fact, those 65 and older represent the fastest-growing segment of the workforce. Maybe you will want to keep working. However, if not, careful budgeting can help you achieve a truly fulfilling retirement. Here are some tips and additional resources to help you craft a meaningful budget.

Before You Retire

What will you need in retirement, and how will you pay for it? Make a detailed list of projected expenses -- necessities as well as lifestyle preferences:

• Rent or mortgage payment
• Home repair and maintenance
• Utilities
• Food
• Health care
• Personal care items
• Transportation (and auto-related costs)
• Vacation travel
• Recreational activities
• Entertainment
• Pet care
• Gifts, charitable donations, and tithing
• Insurance premiums
• Property taxes

Now list your sources of income:

• Earnings if still working
• Social Security benefits
• VA benefits
• Pensions
• Investment accounts
• Savings
• Life insurance

Personal finance expert Dave Ramsey recommends you create a zero-sum budget so every dollar you spend has a defined purpose.

Keep saving, if you can, even after retirement. If you’re 50 or older, the IRS allows you to make bigger annual contributions to retirement accounts, which can significantly increase your savings. You could also sell your home to capture the cash equity, but what if you don’t want to do that just yet?

Note that the National Council on Aging reports that, “Millions of older adults miss out on money-saving benefits simply because they don't apply.” Take a few minutes to see if you’re leaving money on the table.

If you’re exploring senior living communities, be sure you’re comparing apples to apples when it comes to cost. Fees may seem high at first, but not once you understand everything that is included.

Good resources:

• Free guide: How to Make a Plan for Affording Senior Living
• Magnolia Manor Senior Living Cost Calculator
• AARP Retirement Calculator
• How Do I Pay for Senior Living Before Selling My Home?
• The Process of Moving to a Senior Living Community

After You Retire

Whatever the sources for your retirement funds, when you take distributions – and how much – are critical budgeting considerations. This is a lot more complex than it might seem – even Social Security requires some strategic thinking. A professional financial advisor can help answer these questions to maximize monthly income without unnecessarily depleting resources or making costly mistakes.

Along with downsizing your household, it’s time to (honestly) assess your spending priorities. One hefty expense you can easily ditch if you move to a retirement community is property maintenance. Instead, you’ll have the freedom to spend your time doing what you want, not what needs to get done!

Good resources:

• Pros and Cons of Working While Collecting Social Security
• 10 Things Retirees Should Stop Spending on Now
• What Can I Bring When I Move to a Senior Living Community?
• Resources for Managing Your Funds During Retirement

Your Budget Is a Work in Progress

If only we could predict the future! But we can’t, so taking time to contemplate your personal situation will enable you to make the most financially beneficial decisions. That’s good for your retirement wallet and good for your peace of mind.

Stick to your budget, but monitor it closely, because things will change – your preferences, unforeseen health, or other events. Staying on top of your budget will keep you prepared for the unexpected.

Magnolia Manor Offers Affordable Senior Living

The best budgeting tip for whent he time comes is to find quality senior living at an affordable price, like Magnolia Manor. Across our  8 campuses in southern Georgia we offer 8 different levels of care that fit within most budgets. Come see for yourself how wonderful and affordable senior living can be. Call us any time at 1-855-540-LIFE (5433) to schedule a tour.