Retirement is, in many ways, something most people look forward to. Without needing to go to work every day, you have time to travel, spend time with your family, and work on hobbies you may never get enough the time to enjoy whilst working. However, with all the doom and gloom in the media about how many people no longer have enough money put aside for retirement, if you are thinking about beginning to save for your own autumn years, you may wonder exactly how much you need to put away from your paycheck each month, or which of your current assets will help you when the time comes.
Saving for retirement is important, but often when working out a budget, people only take into account their normal living expenses, and maybe a little extra for things like nice vacations or good gifts for their grandchildren at Christmas. While this is a reasonable approach, it can often leave retirees shocked when something unexpected to them (but fairly normal for elderly people) occurs and they are faced with a large bill. Here are some things to consider when working out your retirement budget, which you may not have thought of before:
It may be hard to imagine right now, but in the future, you or your spouse may have mobility issues as a result of normal aging problems. If you can no longer get up the stairs in your house, or can’t get in or out of the bath, for example, you may need to modify your home so that these things are possible again. Things like stairlifts or accessible baths are easy to get hold of and will take care of these problems, but the work required and the units themselves can be quite expensive. Having some room in your budget in case you need to do things like this will make sure your retirement is far less financially stressful, as you can adapt your home as the needs arise.
If you are working out your budget based on the current amount of rent you pay, or the fact that by then, you will have finished paying off your mortgage and housing should effectively be free, it may be worth thinking about what you might do if you can no longer live on your own, or if you want to move into housing specifically aimed at the elderly where there is care available and other people in your age range to socialise with. Saving money for comfortable retirement housing within your budget can alleviate these worries, and means you don’t have to sell your house if you were planning to pass that on as a legacy to your children or other loved ones.
While it may not be easy to imagine being unable to live as normal in your current home at this point in time, factoring in house modifications and the possibility of retirement housing with your budgeting plans can make your retirement far more comfortable.