![]() ![]() But if you’re like most people, most of your retirement income will come from portfolio withdrawals. 1 How are you going to pay for these expenses? Some of your income will probably originate from fixed sources, such as Social Security benefits, pensions and annuities. Bureau of Labor Statistics, a household run by someone 65 or older spends on average $52,141 per year (approximately $4,345 a month). Your expenses may fall into three categories: essential (must-have), discretionary (optional) and one-time (a remarkable but necessary occurrence).Īccording to the U.S. This will help you determine the retirement income you’ll need to meet your average monthly expenses as well as cover surprise expenses. When you turn age 73, you’ll have to begin withdrawing required minimum distributions from most retirement accounts.Įssential, discretionary and one-time retirement expensesįirst, understand what types of expenses you’re likely to incur and how big they’re going to be each year. ![]() For example, you may have ongoing expenses for a specific amount, but you may also have a fixed expense that lasts only a certain number of years, such as a mortgage.Īs you complete your budget planning worksheet, you must also take into consideration your changing income picture. It’s important to itemize and categorize your anticipated average monthly expenses as you plan your retirement spending. Will you spend more on travel or hobbies once you have more time to devote to them?.Do you have all of the insurance you need, or should you budget for additional premiums, such as long-term care insurance?.Have you factored in the increased out of pocket medical costs that often accompany age?. ![]()
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