Hi, my name is Howard Pressman and I am one of the partners at Egan, Berger and Weiner. We are a Northern Virginia fee based financial planning firm.
If you're living in or heading into retirement and have built up a comfortable nest egg, you're probably no stranger to disciplined budgeting. But budgeting in retirement is likely more important than ever before. You'll need to carefully to account for needs, wants and those unexpected expenditures to help ensure you don't outlive your savings. A successful retirement is about leveraging your savings through thoughtful planning and intentional spending.
To make a budget for retirement, you'll need to take stock of all your sources of income, which may include items such as Social Security, pensions, rental income, and others. Using this information, you should be able to estimate your monthly and yearly income.
Next, let’s think about your expenses starting with the essential items first.
• Housing: Will you need to continue paying a mortgage? Or maybe your home will be paid off. Remember, after you’ve paid off your home you still must pay property taxes and insurance, so the whole amount of your mortgage payment doesn’t go away.
• Taxes: Taxes will include what’s owed on your retirement income sources, on withdrawals from your retirement savings and on any dividends and interest you earn.
• Health insurance premiums: These may include Medicare and any supplemental plans you have.
• Healthcare costs: Consider your current and future healthcare needs and related expenses, including copays, deductibles and commonly requested services that might not be covered by Medicare.
• Unplanned expenses have a nasty habit of cropping up at the worst time: If you don’t already have one build and maintain an emergency fund to cover these unexpected costs.
Once you have a firm grasp on your needs, you'll have an idea of what's left to spend on your wants, the fun things in life such as travel, experiences, splurging on your family and even some material things. Planning for fun and entertainment is a very important aspect of your retirement plan, helping you enjoy this time in your life.
Not all your expenses will increase when you retire – you might find savings in some areas. For example, if you had a long commute to work, you'll likely save on daily transportation costs, maybe your dry cleaning and clothing expenses will go down too.
Planning for retirement can feel overwhelming, but it doesn't have to be because you’re not alone. When you need help reach out to us at EBW, we’ve been fortunate to help many folks such as yourself get to and through retirement.
Thank you for watching and check out the blog on our website at EBWLLC.com for more great advice and content.
Egan, Berger & Weiner, LLC
Tel: (703) 506-0030 X 113
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Vienna, VA 22182
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