Retirement Budget - Calculating Your Living Expenses
Retirement Quick Tips with Ashley · 6 minutes ·

Retirement Budget - Calculating Your Living Expenses

The theme this week on the One Minute Retirement Tip podcast is: setting your retirement budget. 

Today, we’re moving on from adding up your income sources in retirement and discussing your monthly & annual living expenses. 

Talking points: 

  • Start with the basics first - leave out the travel and the golf membership and all the fun stuff, because you need to know what it takes just to cover the basics with not too much extras. 
  • Extremely important that this is accurate. Perception vs. reality is often very different.
  • What’s included in basic:
    • Food - groceries and eating out (essential)
    • Gas
    • Mortgage
    • Cell phone bill
    • Utilities
    • Insurance
    • Donations - this is my own personal bias, but I believe it belongs here. You may disagree and that’s fine. It can go in the discretionary category that I’ll come back to in a minute
    • Small amount of entertainment (Netflix)
    • Clothing & shoes - basic - if you like to shop at Neiman Marcus, that goes in the discretionary category
    • Taxes - don’t miss this one! Taxes need to be included in your spending budget, but since it’s a irregular thing, many people forget about it
  • Leave health care out for now - we’ll get there tomorrow 
  • Once you accurately determine your basic expenses, you’ll want to add in the more discretionary purchases like travel, subscriptions, memberships, non-essential clothes, eating out, coffee runs. This will also usually include some non-essential expenses that may be important to you, like helping to fund a child or grandchild’s education.

Not sure all the line items to include on your spending budget for both essential and non-essential spending? Not to worry..I’ll send you my favorite worksheet to use for creating your retirement budget. Just email me at [email protected]. And I’ll send you the worksheet to help make budgeting easier and provide more clarity for all the spending categories you’ll want to include in your budget. . 

That’s it for today. Thanks for listening! My name is Ashley Micciche and this is the One Minute Retirement Tip. 


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Tags: retirement, investing, money, finance, financial planning, retirement planning, saving money, personal finance

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