Budgeting for Retirement and Assisted Living

Budgeting for Retirement

With rising costs and anything that comes unexpectedly the importance of budgeting for retirement becomes important. If you are nearing or into your retirement years, it is important to have a financial roadmap. Create a plan that helps you budget your spending and enjoy your lifestyle. Including Assisted Living in your budget should also be an important part of planning.

Budgeting basics

  • Match your expenses with your guaranteed income sources. Essential expenses likely include food, transportation, and health care. If your home is paid for, remember to include costs for utilities, taxes, and repairs. The rule of thumb is to pencil in 1% of your home’s value to go toward maintenance.
  • While your transportation costs and perhaps food costs may decrease, expect that health care expenses may increase. A 65-year old couple retiring in 2020 can expect an estimated $295,000 in healthcare expenses over the remainder of the lifetimes. They may be able to take advantage of Medicare or an insurance plan to cover much of that expense. The reality is that supplemental premiums and related healthcare costs will continue to increase.
  • Discretionary spending includes the expenses beyond the necessities. They include things like restaurant meals, travel, entertainment, or gifts to your family or charitable organizations. If your income sources allow funds for fun, set a monthly budget, then set aside unspent money. This can be used to pull from when your discretionary spending is higher (for holiday gifts, a planned trip, etc).

Retirement budgeting

  • Be cautious in your first year with spending. One retirement advisor recommends withdrawing no more than 4-5% in the first year of retirement. Make adjustments in the following years as needed. Your financial advisor is a good resource and there are many online budgeting and debt management calculators that can be helpful.
  • As age and illness affect your mobility and independence, many people choose senior home care in which a caregiver comes to your home to help with housekeeping, meal preparation, transportation to appointments, showering and other activities of daily life. At-home care can be just a few hours a week or 24/7. Our sister company, BeeHive Home Care of Texas, offers flexible, affordable home care across Texas.
  • As aging continues, consider assisted living facilities cost versus nursing home cost. The biggest difference between nursing home care and assisted living is that nursing homes provide medical and personal care in a clinical setting, while assisted living provides personal care in a home-like setting. At BeeHive Homes, we focus on small group homes; many assisted living facilities are large complexes with hundreds of residents. Additionally, assisted living care costs are usually thousands of dollars less per month than a nursing home.

Hopefully, your retirement years allow you the time and flexibility to do all the things you didn’t have time for when you were working. Having a plan is key to making those years simple and comfortable. If we at BeeHive Homes of Texas can help make life comfortable for you or an aging family member, please let us know.

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