Live Well in Retirement without Breaking the Buck

1. Live Well in Retirement without Breaking the Buck Live Well in Retirement without Breaking the Buck - Westhill Consulting Rooms - Quora Elizabeth Evans

2. Savvy retirees know that successful portfolio oversight is just one part of financial success in retirement. Managing expenses is also essential, whether your idea of a splurge is a casual lunch with friends or a luxury cruise. I had asked readers to share their tips for successful budgeting in a previous thread, but enough time had elapsed that I wanted to get their takes on this important topic again. I wasn't just looking for conventional advice about clipping coupons and taking advantage of early-bird specials. Not surprisingly, respondents were eager to share their wisdom on everything from saving on groceries and health-care costs to swinging high-end travel without busting the budget. To read the complete thread or share your own insights on living the retirement of your dreams within your means, click here.

3. 'Beware the Budget Vampires!' Many posts underscored the merits of having a budget in retirement, and readers also shared their specific budgeting tips. JHGalt urged, "Set a budget, and don't break it. You will sleep much better at night." Anticipating near- and longer-term expenses is an important part of the process, noted this poster: "If your car is paid off, you have no car payment, but in the long run you will need to buy another, so budget accordingly. If your house is paid off, but you will need a new roof in five years, again--build this sort of maintenance into your budget."

4. Rickydeee advised other retirees to model out how big-ticket items and unplanned expenses will affect the portfolio's cash flow; software tools can be an enormous help on this front. "Use good-quality financial software that shows the long-term portfolio effect of potential major purchases, medical emergencies, and so on," said this reader. Keeping track of where the money goes on a daily basis is also important, in the view of Jacrod: "We keep track of our daily expenditures in an Excel spreadsheet. This requires a small amount of effort each day but gives us a clear picture of where our money is going. Expenses are categorized in about 20 buckets from Auto to Vacation.

5. Actual spending results are reviewed monthly, which invites a discussion about where the money is going and what we want to do with it in the future. On an annual basis, we compare our spending results and develop a target for each category in the coming year. We include in this budget any significant purchases that we plan to make such as home improvement or travel and revise our outlook for health care and charitable giving. This monthly and annual process helps us to keep our spending in-line with both our retirement plan and with what we value most." Sookegary shared several valuable tips on living well within a budget during retirement. Top of the list? Carefully watching to make sure costs don't creep higher. "Beware the budget vampires!

6. Those are any items that suck the life from your budget: monthly interest charges on credit card bills, sky-high cable or cell phone costs, etc. Every year or two look at where every dollar goes for a month or so and then see if you really intended for that to happen. Cable or phone bill increased when you weren't looking? Call and renegotiate your bill or switch. Satellite radio: still listening to it or is it time to drop it? When's the last time you shopped around for insurance?" Uysses is on board with reshopping insurance coverage, writing, "I go through the painful process of reprising car/home/personal liability insurance package every few years. I saved a bundle the first time. I also use only high-deductible plans." Watching budget line items is a way of life for Carolyn and spouse, and doing so has freed up funds for travel to places like Mongolia. "Other than our first three homes we've always paid cash for everything.

7. We are the ultimate Mr. and Mrs. Frugal. We shop at a discount grocery store. We have Tracfones instead of smart phones. We don't have satellite or cable. We walk three miles at the local mall every day instead of having a gym membership. We drive our cars for at least 150,000 miles. We repair things instead of buying new. I still use my mother's toaster purchased in 1939. At retirement we moved from a high-tax state to one with no state income tax and close to another that has no sales tax." PaulT53 urged other retirees to take advantage of their extra time to scout around for the best prices on stuff they need. "Shop online, compare, compare, compare, and save," he wrote. "With more time available to do this in retirement, savings of 50%-plus and more are available for those who do the research."

8. 'Make It an Expression of Who You Are' However, Rule72 urged retired budgeters not to get carried away with the process. "Try not to watch expenses too close in retirement as this generates stress. I was meticulous monitoring expenses beginning five years before retirement up through the end of the first year of retirement. We retired with an expense plan that allowed for occasional dips in value or surprise expenses." For truth teller, skimping in retirement is not part of the plan. "I don't plan on being frugal at all. I was frugal for 35 years so that I could retire at 55 and not be frugal." Many posters who believe in budgeting said it's important to make room in the budget for what you value--whether it's charitable giving, travel, or hobbies.

9. Advised Chief K, "Structure your retirement lifestyle, including things like cash flow, around the things that bring you joy (or completeness or happiness or Zen or whatever)." NormanR agreed that a budget should be a reflection of priorities. "Prepare a list of retirement trade-offs. For example, would you rather own a larger home and pay real estate taxes, or own a small condo and travel in an RV in your retirement? This is your budget and your creation. Make it an expression of who you are." Numerous posters enthused about the virtues of coming into retirement debt-free. "Being debt-free is the overriding risk reduction in our newly retired life. We paid the mortgage off 15 years ago and have been debt-free since," said Rocky Mountains.

10. One of the simplest ways to make one's inflows line up with outflows, in the view of Mtdoc59801, is to continue to bring in some income. "[Part-time work] provides income, interest, purpose and preserves retirement funds. Now retired for three years and currently age 69, I'm finding that working an average of six to 10 hours per week and netting only one sixth of my full-time pre-retirement income plus Social Security allows us to continue our lifestyle and grow (or at least not deplete) our retirement funds.“ Related Stories Westhill Consulting Insurance - Saving for your ageing parents : an easy guide to where to start - Westhill Consulting Insurance Westhill Consulting Insurance Westhill Consulting