King bell
VIP Contributor
In order to set up a good budget for retirement, it's best to start by listing all of the sources of income that you may have during your post-work life. For many people this will include a pension, Social Security payments, and/or a retirement account.
Next, consider how much money you currently earn each year after taxes and subtract any contributions you make to tax-deferred savings accounts like IRAs or 401(k)s. If this number is lower than your monthly expenses now then it is important to find ways to reduce that number until it is at or below your current expenses level. This will ensure that you are able to live comfortably without running out of money before the end of your life.
In the following section we will look at the expenses that many retirees face.
The first major expense is medical care. Many retirees are surprised to find how much this costs, especially considering that Medicare covers 80% of all health care expenses for seniors. To minimize your medical expenses it is best to plan for major surgery and/or doctor visits in advance by consulting with a health professional and/or seeing what insurance options are available to you. You may also be able to use co-payments or a flexible spending account (FSA) if you have them set up as well as advance payments towards these expenses so that they have saved up a significant amount before you get sick or need an expensive procedure done.
Next, consider how much money you currently earn each year after taxes and subtract any contributions you make to tax-deferred savings accounts like IRAs or 401(k)s. If this number is lower than your monthly expenses now then it is important to find ways to reduce that number until it is at or below your current expenses level. This will ensure that you are able to live comfortably without running out of money before the end of your life.
In the following section we will look at the expenses that many retirees face.
The first major expense is medical care. Many retirees are surprised to find how much this costs, especially considering that Medicare covers 80% of all health care expenses for seniors. To minimize your medical expenses it is best to plan for major surgery and/or doctor visits in advance by consulting with a health professional and/or seeing what insurance options are available to you. You may also be able to use co-payments or a flexible spending account (FSA) if you have them set up as well as advance payments towards these expenses so that they have saved up a significant amount before you get sick or need an expensive procedure done.
