As much as you look forward to retirement, you might find the first year or two a bit rocky. Some retirees are surprised at the difference between living on their former income and their new, fixed retirement income. Following these five tips can help you make a smoother transition.
Focus on experiences. Many of us focused on material gains throughout our careers, and it’s completely understandable to enjoy the fruits of your labor. But studies show that we’re happier when we focus on experiences over material possessions. Retirement is the perfect time of life to change your mindset! Plan to spend your days doing activities you love and spending time with family or friends, and the impact of a new budget will be more gentle.
Decide where you want to live. Housing eats up a considerable portion of most budgets. Even if you’re lucky enough to pay off your mortgage before retirement, you will still owe property taxes, pay for maintenance, and need occasional repairs. Ask yourself if downsizing to a more manageable property would benefit your budget and give you more freedom.
Consider your vehicles. During your working years, you and your spouse probably needed two cars. And along with those cars came two payments, two sets of maintenance costs, twice-annual taxes, and two bills for insurance. Ask yourself if you really need two vehicles now, and investigate public transportation in your area. Many retirees can access free or discounted bus and train fares.
Choose your Medicare plan carefully. For many retirees, healthcare becomes their largest monthly expense. Medicare actually offers a number of different plans and supplemental plans to help you manage your out-of-pocket costs, like copayments and deductibles. But no single plan is right for everyone. You need to work closely with a health insurance broker who can help you determine which Medicare plan best suits your budget and healthcare needs.
Try eating at home more. Your retirement budget might be tighter than the budget you enjoyed during your working years. But those busy years often required work lunches and expensive take-out meals on weeknights. In retirement, you will have the time to cook more of your meals at home, and it can save you a significant amount of money too.
And of course, make an appointment with us if you’re concerned about the transition to a retirement budget. We can examine your concerns and help you come up with potential solutions so that you can relax and enjoy retirement.