Saving for retirement, how much to save for retirement, how and what to spend in retirement are all questions folks approaching, preparing for, and in retirement may ask themselves. With so many unknown variables, it can feel overwhelming. Thankfully, there are lots of people who have embarked on retirement already and are willing to share advice. The Wall Street Journal asked their readers for their best retirement spending advice, and they offered some great information and tips.
Plan to Be Surprised: Many readers wrote that they spent more than expected in retirement. Some spent a little more, and some spent a lot more. The reasons can vary, but it is a good idea to recognize that this is a possibility, and have a plan in place to prepare.
Continue Budgeting: Once you retire and set your budget, it is important to remember to revisit it from time to time. Needs, wants, and situations may change. As such, your budget may need to be adjusted. It can also be a great way to find ways to cut back or save money, which can be allocated to other things or saved to keep those retirement savings around longer.
Keep Wiggle Room in the Budget: Many suggested creating your budget, and then adding 10% of that budget on top of it for unexpected expenses or events that undoubtedly will creep up.
Create a Rainy Day Account: At the onset of retirement, some readers wrote that they created Rainy Day or "Stuff Happens" accounts with a relatively large sum of money. Obviously this is dependent on one's individual finances, but they suggest having this account so that in the event a significant expense pops up, like a major home repair (think thousands of dollars), for example, the money is in the account already, and, importantly, additional funds remain for the next unexpected expense.
Reconsider Adding Furry Family Members: In retirement, many folks travel significantly more and are more active outside of the home. There is also the financial consideration of having pets. It is important to evaluate the cost of kenneling your pets when traveling, cleaning up and taking care of them, and more. Your new lifestyle in retirement may just not be as conducive to having pets. Obviously, this is a very individual decision, but something that is important to consider.
These are some great things to consider as you plan for or near retirement. In reality, these are helpful tips even if you find yourself already retired.