{"id":254,"date":"2019-07-18T10:00:39","date_gmt":"2019-07-18T15:00:39","guid":{"rendered":"http:\/\/gpswp.com\/retirementresourcend\/?p=254"},"modified":"2019-07-18T10:00:39","modified_gmt":"2019-07-18T15:00:39","slug":"avoid-new-retirement-over-spending","status":"publish","type":"post","link":"https:\/\/gpswp.com\/retirementresourcend\/avoid-new-retirement-over-spending\/","title":{"rendered":"Avoid New Retirement Over Spending"},"content":{"rendered":"
You\u2019ve put your time in and the day you\u2019ve been waiting for has finally come. It\u2019s time to retire! You\u2019re done working 40+ hours a week and ready to enjoy the money you\u2019ve been saving for years. Slow down for a minute, though. It can be tempting after working for so many years to start checking off all the items you\u2019ve been adding to your bucket list throughout the years, but this can lead to some severe overspending. It\u2019s a nice gesture to invite your entire extended family on vacation or help your children pay off some of their debt, but you need to focus on the future. <\/p>\n
When you work, you have a steady stream of income along with a healthy savings account to fall back on when unexpected expenses pop up. When you retire, it\u2019s like someone just threw a few hundred thousand or million dollars at your feet and said \u201chave fun!<\/p>\n
You can avoid overspending by cutting back on certain luxuries you\u2019re used to having. The balance comes with developing a smart financial plan to ensure you live within your means while still enjoying the quality of life you\u2019re used to. Here are some essential tips to get you started on the right path.<\/p>\n
Create a Budget<\/strong><\/p>\n You should be no stranger to a budget by the time you retire, but you\u2019ll need to start tweaking it to adjust to your new financial circumstances. Know how much money you\u2019ll have coming in between social security, pensions, and your retirement plans such as a 401k. Split your expenses into those that are required, such as housing, food, and vehicle maintenance, and another category for discretionary purchases like vacations. <\/p>\n Develop a Withdrawal Strategy<\/strong><\/p>\n Once you know how much you need to live comfortably every month, you can determine how much you need to take from your retirement every month. A standard 4% withdrawal rate should tentatively last 30 years, but this can vary based on your savings, the financial market, interest, and hefty expenses such as healthcare. <\/p>\n Cut Back on Expenses<\/strong><\/p>\n Cutting back on spending is painful if you\u2019re used to getting what you want when you want it, but it\u2019s a necessary part of smart financial planning. Evaluate whether you can make changes to the two highest expenses: housing and health care costs. <\/p>\n Healthcare:<\/strong> Retirees spend roughly 11.4% of all income on medical care because Medicare only covers 80% of costs. That 20% responsibility can swallow up your income. It also fails to include eye exams, orthotics, and dental care. Find a supplement plan to help ease your financial burden. <\/p>\n