Retirement Lifestyle

A retirement lifestyle budget can be used to work out the gap between expected income and the income needed to fund your retirement lifestyle.

Do you have a budget for your retirement lifestyle?

Many people think in general terms about what retirement living will look like. “I’ll remain in my home and continue to pay for property taxes, heat, and hydro. I’ll spend 4 months of the year at the cottage or somewhere that it’s warm.”

To get the most from your money, budget for the retirement lifestyle you want to have. If you are already retired, it’s never too late to create a budget.

According to a retirement study by Mackenzie Investments, “Just 18 per cent of employed Canadians feel very confident that they will have enough income in retirement to live the way they would like and only 29 per cent of retired Canadians are very confident that their income will last for the rest of their lives.”

To help you feel confident about your retirement years, start working on a plan and a budget.

Create a retirement lifestyle budget using our Money Measures software. Call 1-877-352-5360 for individual instruction on using the web browser app or register for one of our free webinars. Doing a budget will help you get the biggest bang for your retirement spending buck. Create your free account today.

How much money will I need in retirement?

Our income in retirement is a major factor in the retirement lifestyle we can expect to have. It makes sense, therefore, that a common question people have is about the amount of money needed to live in retirement.

If this is your question right now, then now is the time to consider the lifestyle you want in retirement. Attach a dollar amount to the lifestyle you currently have in mind by creating a budget for it. Your question is answered about the amount of money needed to live in retirement. At least, based on your current way of thinking.

If you are close to retiring, you can finetune the budget you created. If you aren’t close to retiring, your retirement plans will evolve, as will the budget for your planned retirement lifestyle at any point in time. However, you will likely experience some personal revelations and epiphanies as you do your preliminary thinking.

Do some research also into the cost of retirement and long-term care home living. Do a budget for it. To have your own room in a retirement or long-term care home, how much income is needed? How much will it cost to receive personal care that goes beyond the basics? In many places, it costs extra to have help to take more than one shower a week. This is just one example. In an ideal world, everybody will have a dignified life in this very important stage of life. I have been a caregiver for people in retirement and long-term care home settings. Living with dignity has a price tag attached to it. It’s not fair, but it is a fact. There’s a reason the push is on to pass legislation that mandates a minimum level of care for residents in long-term care homes.

How do I use a retirement lifestyle budget?

If you are years away from retiring, use a retirement lifestyle budget to see if it’s reasonable that your expected retirement income will cover your planned lifestyle. If it won’t cover it, how much more needs to be saved? Will your lifestyle choices need to change? Your CFP can help you work through this.

I know homeowners who want to maintain their pre-retirement lifestyle in retirement. They are being told by CFP’s that they will need $300k to $1 million or more saved to supplement government and company pensions in order to retire on their terms. More specifically, retire when they want to retire and maintain their pre-retirement lifestyle in retirement.

There are many things specific to your situation that will factor into the amount you have to save. The amount of time you’ll have to save the money depends on your age now and the age at which you want to retire.

Here’s a short list of things to include in your overall retirement lifestyle planning and budget:

  • Do you own a home and downsizing will be a way to contribute to the next egg?
  • Health issues.
  • What does the retirement lifestyle you are hoping to have look like? Is travel involved? Do you like spending time at the beach or on the golf course?
  • When you need to move to a retirement or long-term care home, do you want a room to yourself?

You can work with your CFP to develop a more comprehensive retirement plan.

Life can still throw you a curve ball, which often relates to physical health. It is easier to handle the curve balls when you have a budget in place.

Are you retired already and living on a fixed income?

Living on a low fixed income could mean there isn’t much money for recreation in your retirement years. Your retirement lifestyle will be further compromised if debt is involved. Having a budget — in particular, a long-term budget — is a way to get the most from your money.

If you have no budget and are living on a low fixed income, life may be revolving around the monthly payment(s) coming into your bank account. You may be ready to do your happy dance if no curve balls have come your way, because you will have money left to burn.

With a plan and a budget, it’s possible to incorporate more of what you want to do into your day-to-day life. This way, you aren’t spending your retirement years waiting impatiently for the day(s) when money comes into your bank account.

Retirement Lifestyle and Hobbies

I don’t know what inspired my dad to bake his first pie. He was in his 60’s. I thought my mom baked a mean pie, but — sorry mom — dad’s pie crust was the best. Any pie he made was to die for because of the crust.

Diving deeper into an existing hobby or taking up a new hobby should be on everybody’s bucket list. There are a variety of hobbies that cost very little or cost nothing at all, so exploring hobbies is something anybody can do regardless of income.

Here is a short list of hobbies that can be done at no or low cost. You can do them for your eyes and ears only for pure enjoyment, but I have included examples of how to add purpose to the hobbies. It’s good to share what you love and share what you know.

Reading and storytelling: Become a volunteer storyteller for children at a local library or school.

Writing: Become a blogger.

Arts and crafts: Do arts and crafts as a fundraiser.

Cooking and baking: Give the goodies to people in your community who are going through challenging times.

Music: Retirement and long-term care homes love having people entertain residents, but more importantly, residents love being entertained.

These hobbies can also help you earn extra money. Other hobbies people can pursue to make extra money are woodworking and buying and selling collectibles. If you like taking pictures, you can earn passive income by selling photos on iStock, Canva, Shutterstock or other similar sites.

When you want to try your hand at gardening, help at a community garden if gardening isn’t an option where you live.

Other things to consider

Here are links to more information to consider in your retirement lifestyle planning.

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