Many prospective retirees focus most of their energy on saving alone. They worry about whether they have enough to retire on and whether or not they will be able to retire early or on-time, on-time or late. Very few actually consider how they would like to spend their money during their retirement which is actually just as important.
Sure, when beginning to plan for retirement, most incorporate living expenses, but few consider how they would like to spend their money to actually enjoy their retirement. Retirement shouldn’t be solely about having enough to get by – it should be about finally enjoying the life you worked so hard to save for.
So where is the balance? If you spend too much of your retirement on vacations or other activities early on, you may not have enough to cover the costs of high medical bills later on. However, if you don’t spend enough, you may be racked with regret for not doing some of these things you wished you would have when you could have.
Finding the right balance between saving and spending is all about adequate Retirement Planning.
When in retirement, retirees will have to consider any health expenses they may have in the future – including live-in care or assisted living. If your family has a long line of specific health concerns, you may not want to spend as much early in your retirement as someone from a family without health concerns simply to make sure you will have enough money throughout retirement.
There is no doubt that your ability to pursue activities will decline with age which is why so many are prompted to pursue a variety of activities early in retirement. Spending more during early retirement can also be mentally and physically beneficial as maintaining a higher level of activity can keep you healthier longer and can help you transition from your professional life into your retired life.
To help you maintain your retirement budget, use a simple give and take strategy. If you choose to travel more in your early years of retirement, then consider other ways you can cut back, such as down-sizing your home or buying generic brands, to accommodate the spending. This way you will be able to enjoy traveling and other activities while also avoiding jeopardizing your retirement in later years.
Don’t let fear prevent you from enjoying your retirement. Simply be realistic and properly plan for what lies ahead. If you haven’t reached retirement yet, and know that you are looking forward to numerous trips abroad or a few visits to a fancy tennis resort, save additional money for these activities now. Life is meant to be enjoyed, and if you don’t plan on enjoying it during your retirement well then you might as well not leave the workforce.
This is a guest post. I hope you enjoyed it!
My name is Derek, and I have my Bachelors Degree in Finance from Grand Valley State University. After graduation, I was not able to find a job that fully utilized my degree, but I still had a passion for Finance! So, I decided to focus my passion in the stock market. I studied Cash Flows, Balance Sheets, and Income Statements, put some money into the market and saw a good return on my investment. As satisfying as this was, I still felt that something was missing. I have a passion for Finance, but I also have a passion for people. If you have a willingness to learn, I will continue to teach.