Your post-working years are considered golden as it’s your time to spend long hours in bed without worrying about being late in your client’s meeting. For some, it means freedom and enjoyment. For others, it equates to a stress-free life of traveling, pursuing a passion, and spending more quality time with family and friends.
But is your savings enough to cover your expenses for the rest of your life? Is it adequately substantial to support unexpected expenses and live your life comfortably without the stable monthly earnings? It is best to consult financial advisors like Renzy Wealth Management so that they can help you answer these questions. Here are some things that can help you plan your retirement:
Common myths about retirement
- Decreased expenses
A lot of people believe in the assumption that the retirement phase requires fewer expenses. The truth is, they stay the same or become even higher. Before retiring, you are spending money on basic needs like food and electricity. When you stopped working, it doesn’t mean that you will also stop eating or would not need a power supply. Chances are, your utility bills will go up since you spend more time at home. You are indeed exempted from paying payroll tax, but the savings that you will get from such exemption will be spent on other things such as travel and leisure activities.
- If you don’t have enough savings, you can continue working
If you’re in perfect health, you can work until or over 70 years old. Life, and that’s including your health, is unpredictable. Unexpected health issues can hinder your productivity and efficiency in performing your core functions. A new survey shows that 18% of retirees had to stop working because of health problems, while 9% were laid off by their companies because of financial difficulty. Of course, you can always look for a part-time job, but most stories will tell you that well-paying half-time jobs are more demanding than what you think.
What are the expenses that you should plan for?
Ditch the myths and properly plan your retirement by knowing the expenses that you need to pay during your golden years.
On average, housing expenses can range from $1,322 per month but can go higher depending on the location. It’s best if you can pay off the mortgage before retiring so you don’t have to be bothered about the monthly payment.
Healthcare expenses can range from $499 if you don’t have a lot of health issues. To cut on costs, make sure to buy generic drugs that have the same effect as branded medicine whenever possible.
Even if you’re already a senior, you still need to eat and buy groceries. Make smart buying decisions and take advantage of online coupons and promotions.
- Utility bills
Upon retirement, you have to use the same essential utilities: water, electricity, and heat. You can lessen your utility expenses by upgrading inefficient appliances and downsizing your home.
Other expenses that your pension has to cover are leisure, communications, and long-term care. Carefully planning for your retirement and having financial security are essential if you don't want your golden years to lose its luster.