Everyone pictures retirement differently. For some, it’s the opportunity to travel and experience new things. For others, it’s helping with the grandkids and staying close to home. No matter how you picture your retirement, one notion will always ring true – every day is a Saturday.

Many people don’t realize that expenses can quickly rise in the first few years of retirement. Therefore, it’s crucial to adequately prepare for your retirement and develop a budget that will allow you to experience the things you were forced to put off during your working years while still spending responsibly.

No one wants to outlive their money, so – whether you intend to spend your last penny on your last breath or leave as much as possible to your heirs or charity – budgeting for retirement is critical for stability and contentment. Therefore, abiding by a few simple rules can significantly enhance how well your budget will serve you throughout your retirement years.

Get Organized

A reliable retirement budget is built on solid and valuable information. The first step in creating your retirement budget should be gathering all pertinent information, including your account statements, bills, and anything else that might be useful. Go back at least six months, if not a year, to get a good idea of the average figures so your budget isn’t skewed. This is especially true if you live in a seasonal state or work in a seasonal industry where your income or expenses can ebb and flow according to the season.

From there, you will want to create a budget or spreadsheet that organizes the information into a concise and insightful document. For ease of use, you should preferably use a computer or mobile device, but paper will also suffice.

Have a Heart-to-Heart Conversation With Yourself

As the old adage goes, there’s a big difference between needs and wants. When income is more constrained during retirement, it’s essential to differentiate between what you need and what you prefer. In other words, water, electricity, and healthcare are fixed, nondiscretionary expenses, but you don’t necessarily need the sports package from your cable provider.

Of course, after a lifetime of work, retirement should be a time to enjoy life and not constantly pinch pennies. Therefore, prioritize any extravagances you don’t necessarily need but would enjoy. Those are the types of items that should be included within your retirement budget for entertainment and general enjoyment.

Prepare Your Budget

Once you’re properly organized and have identified and prioritized extraneous but essential expenses, start preparing a simple budget with your income and fixed expenses. Consider the resulting amount the flexible portion of your budget, which can now be devoted to savings or spent on traveling, hobbies, entertainment, or other expenses. Once you have a working template, remember that your budget should be continually revisited to ensure it’s accurate, informative, and based on the most current data possible.

Would you like help creating a budget or implementing ath your financial plan? We’re here to help! Simply click here or call (763) 445-2772 to schedule a complimentary consultation today!

Note: This content was updated June 2025.