There are many different ways to save for retirement, and how you go about it depends on your particular situation. For example, as entrepreneur and CEO of Everest Business Funding Scott Crockett points out, some people may have a pension to help support their retirement, while others may rely on Social Security and other savings plans.
No matter what financial situation you’re in — and where you are in your retirement savings journey — there are simple steps you can take to create a happier retirement. Here are some budgeting strategies to help you create your desired retirement.
Know How Much You Need
Saving for retirement can often seem theoretical when, in fact, it revolves around basic budgeting at its core. Some people save for retirement without a real idea of how much they will actually need to live the happy retirement of their dreams. Of course, the downfall is that they may be saving toward an unrealistic future.
When you are creating a retirement savings strategy, you need to start by understanding how much your lifestyle will cost. Create your budget around all the “must-haves” in your life, including housing, food, transportation, health care, insurance, taxes, and other debts.
Then, you can work on other discretionary spending such as gifts, travel, and entertainment. Creating this overall retirement budget will give you a better idea of how you’ll need to save to realize these dreams.
Don’t Move Too Far Away
Travel and housing are two of the largest expenses people face in retirement. Understand that the further you move away from your friends and family, the more you will have to spend on travel to visit them — or that they’ll have to spend to visit you.
In addition, many of the most popular retirement destinations also have a much higher cost of living. If you have a rather large group of family and friends you want to see often in retirement, consider living in a location that’s not too far away from them.
Manage Investments Once You Reach Retirement
Investing strategies shouldn’t stop once you reach retirement age. Certainly, your overall approach to investment might change — from an aggressive one in your younger days to a more conservative one in retirement, for instance — but your ultimate goal should stay the same.
Investing during retirement means ensuring your money is producing the sufficient income you’ll need while also minimizing your risk. So, make sure to incorporate investment management into your retirement budgeting strategies.
Set Up Withdrawal Limits
According to Scott Crockett, a great budgeting strategy for retirement is to approach your retirement withdrawals as employment income. Consider each of your withdrawals as your new paycheck, rather than money that automatically appears in your account regularly.
This will help you approach your withdrawals from a more sensible place. In other words, it can help you limit how much you spend so you can limit how much you dip into your retirement accounts. Ultimately, this will stretch your money further and allow you to create a cushion for unexpected expenses.
About Scott Crockett
Scott Crockett is the founder and CEO of Everest Business Funding. He is a seasoned professional with 20 years of experience in the finance industry. Mr. Crockett’s track record includes raising more than $250 million in capital and creating thousands of jobs. Scott has founded, built, and managed several finance companies in the consumer and commercial finance sectors.