When you picture your dream retirement, what comes to mind? Maybe you're looking forward to soaking up the sun on a beautiful beach. Or, perhaps you'd like to learn a new hobby or maybe spend more time with family and friends?
With the right plan in place, you can work towards your ideal retirement while making sure your savings last. Try these simple strategies to help you spend and manage your money safely in your retirement years.
Estimate your expenses
Once you retire, most of your monthly living expenses will remain the same, such as groceries, utilities, clothes and other basic necessities. However, some expenses might increase, especially healthcare costs. And, depending on your desired retirement lifestyle, you might have some extra expenses to account for, such as:
- Travel
- Dining out
- Hobbies
- Continuing education
- Gifts
- Gym membership
- Dues to social clubs
- Charitable donations
As you get closer to retiring, you should have a clearer picture of what expenses to expect, so be sure to update your plan as you go.
Determine your retirement income
Next, calculate how much money you'll need in retirement, keeping your retirement expenses in mind. A good rule of thumb is to assume you'll need 80% of your annual pre-retirement income to maintain your current lifestyle in retirement. Using a financial calculator can help you determine if you're on track with your savings goals.
Create a retirement spending plan
The best way to spend and manage your money safely in retirement is to create a retirement spending plan. Much like a budget, this involves matching your income to your expenses. Having a realistic retirement savings plan will help you avoid a common worry among retirees: spending too much too soon.
As you get closer to retirement, consider when and how you'll withdraw from your retirement fund. Experts generally recommend withdrawing between 3 and 5 percent of your total savings in the first year of retirement. Meeting one-on-one with a financial advisor can help you decide on the best strategy for your personal situation.
Helping you plan ahead for a happy retirement!
At Wright-Patt Credit Union (WPCU), your retirement goals are our passion! The CFS* financial advisors and registered representatives on WPCU's Retirement Solutions Team, available through CFS*, are available by appointment to help you build a plan that's right for you and your future. Schedule a complimentary, no-obligation appointment today to learn more about your retirement planning options.