Testing Your Retirement Budget

Testing your retirement budget

If you've always enjoyed spending right up to the limits of your income (or even exceeding them) whilst you've been working, how will things need to change for you when you retire?

Most people have to have some sort of budget in place once they retire - after all, there aren't many people who would tell you that they have so much money from their retirement income that they'll never again have to worry about their cash flow.

If you're worried about your ability to cope on your retirement income, give it a trial run for six months now to see how you get on. This is easy enough to do:

1. Find out what your projected retirement income will be.

2. You're going to need two bank accounts. The first is your current account which you're going to use as your 'pension account', i.e., the account in which you keep your projected retirement income and the money which you'll live on for the next 6 months. The second account will be a deposit account and you'll 'sweep' the difference between your net salary and your pension into this.

So, for example, if you were expecting a total monthly retirement income of £1000 and you receive a salary of £2000, on pay day, you sweep the excess £1000 from your current account into your deposit account, leaving yourself £1000 to live on for the next month.

3. After you've done this for 3 months, you'll be able to tell if you're going to be able to cope on your projected retirement income or not. If it becomes obvious that you're going to struggle, you have time to do something about that situation now. Maybe you need to have a word with your employer and arrange to continue working a little longer to accrue more pension savings. Or maybe you could get a part-tine job somewhere else. Or start a retirement business.

Create Your Own Bucket List

Bucket list
How many things have you done in the last five years that you consider to be meaningful? You can bet that you’ll have even more meaningful experiences over the next five years if you create a bucket list.

You might consider a bucket list to be silly or something that you should have done earlier in your retirement, but it’s never too late to start examining your life and prioritizing your time.

Create a bucket list that fills you with enthusiasm:

  1. Start with childhood. You had a lot of great ideas when you were a child. You’ve forgotten many of them or dismiss them as silly childhood dreams. Now is the time to dust them off and reconsider. What did you want to do and see as a child?

  2. Check out other bucket lists on the internet. You’ll be amazed at some of the things you’ll find that you’ve never considered. Get inspiration from others.

  3. Brainstorm. Take an day to work on your list. Turn off all your electronic devices and allow your imagination to run wild. Write down everything that comes to mind without judging it. You can evaluate your list at another time. It might be easier to come up with ideas if you consider particular categories one at a time.

  • Travel. Where have you always wanted to visit? Consider places near and far. Maybe there’s a famous burger joint in the next town or a state park you’d like to visit. Remember that the world is big, but largely accessible. In one day, you can find yourself anywhere on Earth.

  • Sports. Have you ever wanted to try hang gliding or learn how to ice skate backwards? Run a marathon or try deep sea diving?

  • Adventure. Ride a camel across the desert? Fly in a helicopter? Try your hand at zip lining? Ride across the US or Canada on a motorcycle? Swim with dolphins?

  • Events. Maybe you’ve always wanted to attend a Super Bowl or watch the Rolling Stones live. Do you have a favorite comedian you’d like to see? Watch the northern lights? Watch a famous opera or ballet?

  • Creativity. Write a book or song? Learn to play the banjo? Take salsa dance lessons?

  • These are just a few ideas. What other categories come to mind?

  1. Give yourself a week to continue adding to your list. You’ll find that new ideas pop into your mind at random moments. Keep adding to your list and don’t worry about the length. You can pare it down to size later.

  2. Ask your friends for ideas. Find out what your friends have put on their bucket lists. You’ll get a few more good ideas, as well as a few suggestions.

  3. Prioritize your list. Rank your big list from most desirable to least.

  4. Make plans for this year. Starting at the top of your list, which items could you do this year? What do you need to do to make this happen?

  • Decide what you can do to overcome your limitations and put your plan into action. Once you’ve set an objective, it’s important to take a first step as soon as possible. Show yourself that you’re serious by making preliminary plans.

Now that you have a good bucket list, get busy crossing off items from your list! Making a bucket list is valuable because it requires you to think and prioritize. Think carefully and rank your list items. Creating a bucket list can help ensure that your life remains exciting and fulfilling in retirement - and will, hopefully, leave you with fewer regrets at the end.

It's surprising what you'll miss...

Car park spaceIf you can't wait for retirement and you've already started checking off the days on your calendar, you may be surprised to find that, once you retire, there are some things you might miss about work.  

1.  You might miss the challenge of the work you used to do.  Well, you probably won't miss the stress that used to accompany the challenge, but the feelings associated with being challenged - feeling stretched, the pressure to come up with solutions to a problem and the satisfaction of overcoming the odds when you succeed.

2.  Many retirees miss the daily banter that is part and parcel of being at work - the jokes, the witty repartee, the sarcastic quips and the camaraderie.

3.  Retirees who had fairly eventful jobs have reported that they miss the drama associated with being at work - and that even though the drama could be stressful, it was never boring.

4.  Other retirees have said that, now that they're retired, they long for some responsibility.  Even the ones who had found work after retirement tended to be working in part-time jobs that were fairly undemanding. They often found these jobs to be unfulfilling and longed for some responsibility and the satisfaction of having done a good day's work

5.  Many retirees report that they miss having some space between them and their partner - this came from both male and female retirees.  Females were concerned about husbands getting under their feet.  Males were concerned about being at the mercy of their partner's  'just do lists'

What do you think?  Have you recently retired and found yourself bumping up against some unexpected feelings and emotions?  Do you know someone who retired and found themselves struggling to cope with no longer being in the workplace?  What will/did you do to help you get over it?

A is for... inspiration

I recently acquired a list of 1000 business ideas.  I'm not sure what, if anything, I'm going to do with it yet but it's, literally, an A to Z of ideas.  If you're in the market for a retirement business but you're stuck for inspiration, here are 82 ideas that begin with the letter A for you to consider...

1. 3D Artist
2. Accessories Store
3. Accounting Auditor
4. Accounts Payable
5. Accounts Receivable
6. Ad Copywriter
7. Adult Daycare
8. Adult Entertainment
9. Adult Toy and Novelty Store
10. Adventure Tours
11. Advertising Agency
12. Advertising Sales
13. Aerial Photographer
14. Aerial Seed and Spraying Service
15. Aerobics Studio
16. Affiliate Manager
17. Affiliate Marketer
18. After School Care
19. Agricultural Consultant
20. Air Charter Services
21. Aircraft Design
22. Aircraft Engines
23. Aircraft Parts
24. Airport Transportation Service
25. Alarm Equipment Sales
26. Alarm Installation
27. Alarm Monitoring Service
28. Allopathic Physicians
29. Amphibian Breeding
30. Amusement Park
31. Amusement Park Equipment
32. Anesthesiologist 
33. Animal Breeder
34. Animal Hospital
35. Animation Services
36. Announcements
37. Answering Service
38. Antique Dealer
39. Antique Locator
40. Antique Restoration
41. Apartment Building Maintenance
42. Apartment Cleaner
43. Apartment Rental
44. Appliance Rental
45. Appliance Repair
46. Appliance Store
47. Appointment Reminder Service
48. Appointment Scheduling Service
49. Aquarium Maintenance Service
50. Aquarium Sales
51. Aquarium Set Up Service
52. Arbitration Service
53. Arcade
54. Archaeologist
55. Architect
56. Architectural Engineer
57. Architectural Supplies
58. Aromatherapist
59. Art Broker
60. Art Gallery
61. Art Restoration
62. Art School
63. Art Supplies
64. Article Distribution Service
65. Article Writing Service
66. Arts and Crafts Classes for Children
67. Assistance Dog Training
68. Astrologist
69. Astronomer
70. ATV Park
71. ATV Rentals
72. ATV Sales
73. Auctioneer
74. Audio Visual Equipment and Supplies Rental
75. Audio Visual Equipment and Supplies Sales
76. Auto Body Repair Shop
77. Auto Customization
78. Auto Detailing
79. Auto Painting
80. Auto Part Refurbishment
81. Auto Parts
82. Auto Repair Shop

7 misconceptions about retired life

This is interesting...

Most people expect that their lives will get better once they retire and things become less stressful, with more time for hobbies and travel.

However, according to a recent poll of 1,254 individuals aged 50 and older, carried out by NPR, the Robert Wood Johnson Foundation and the Harvard School of Public Health, that might not be the case. 

A quarter of retirees think life in retirement is worse than it was before they retired and 44% think that their quality of life is about the same as it was whilst they were still working.  Find out more.

Free to be me...

Many people say the best thing about being retired is that they're finally 'free to be me'.  For the first time in their life, they can go where they want and do what they want, when they want.  They can wear what they want and they don't have to answer to anyone else, meet anyone else's deadlines or jump through anyone else's hoops.

What does 'free to be me' mean for you personally?

For example: Are you, by nature, a lark or a night owl?  Many night owls have been forced into becoming 'morning people' over the course of their working lifetimes because of the demands of their jobs and parenthood.  However, when you're no longer a slave to your alarm clock and can become more in sync with your own circadian rhythms, what time will you get up in the morning?  What time will you go to bed at night?  (Circadian rhythms are regular rhythms of growth and activity, which occur in an approximately 24-hour cycle.) 

Will you linger longer?

According to a US news report, many retired people report that they enjoy just 'lingering longer' - they spend longer reading the paper, enjoying the taste of that cup of coffee, actually looking at what's on the supermarket shelves rather than doing the usual 'shopping cart dash'.  They spend more time enjoying a meal, rather than bolting down their food.  They even linger longer over household chores!  What are you really looking forward to doing that you never had time to do when you were working?

Keeping up appearances

When you no longer have to dress for work, what will you wear?  Will you slob out all day in t-shirts and sweats or will you still be a 'neat ned' and keep up your dress standards?  (I'm a mix of both - t-shirts and sweats when I'm working from home and 'neat ned' on the days I'm out and about!)

What effect will your freedom have on your health?

When you have more time to spend on food shopping and food preparation, will your eating habits and patterns change?  And, if so, how?

The US News report referred to earlier also said that retirees watch, on average, 4 hours of TV each day, compared to the two and a half hours that the rest of us watches.  Will you spend an extra one and a half hours (or more) sitting watching TV or will you be up and about, exercising and making sure you stay fit and healthy?

And finally...

Another important question to ask yourself is: Will watching more TV and lingering over food, shopping and household chores be enough to keep you happy, engaged, enthused and productive in your retirement?  Does that sound like the 'free to be me' that you were hoping for?  Or were you hoping for something a little more exciting?

What does 'free to be me' look like for you?

How will you spend your time?

Retirement can, on average, free up between 2,000 and 3,000 hours per year.  That's after you add in the time you spend commuting, thinking about and working on work-related tasks at home and physically getting ready for work each day.

So, how will you fill those 2,000 to 3,000 hours once you retire?

Will you spend more time sleeping?

If you've spent the whole of your working life feeling sleep-deprived because you just didn't have enough time to do everything on your to-do list, you might be looking forward to those long lie-ins once you retire. 

And, of course, many people who are, by nature, 'night owls' have been forced into becoming 'larks' because of the demands of their jobs and parenthood.  If that sounds like you, when you no longer have to be up and at 'em at the crack of dawn every day, you may find yourself reverting to the night owl you always were at heart.

On the other hand, you might be determined to make the most of all the time you've freed up and adopt an 'I'll sleep when I'm dead' attitude.

Will you still work?

Do you intend to retire completely or are you one of the estimated 7 out of 10 people who wants or needs to carry on working (in some capacity) once you reach the traditional age for retirement?

There's a lot of evidence to suggest that the people who have the most successful retirements are the ones who keep themselves active and engaged.

There's also a lot of evidence that many people nowadays don’t actually want to retire at all. They just want to do something else and they want to do it on their own terms – for example, they want to be able to choose when they work and for how long. Or they want to do something completely different - such as voluntary work in a different field to the one in which they made their living.  So the big question is: Do you want, need or feel that it would be beneficial to continue to work after you ‘officially’ retire?

Will you spend more time with your family?

How much time do you want to spend with family members after you retire?  Some questions to think about in this area include:

What expectations do your partner, your children, your grandchildren and your elderly parents have about your retirement? Do your expectations and theirs blend together?  Will someone be expecting more of you than you are prepared to give? Does someone have their eye on you as a potential babysitter or caregiver and what effect will this have on your own plans for your retirement?

Will you spend more time on your hobbies?

If you're the type of person who's never had a problem filling their spare time, you probably already have a satisfying blend of hobbies, interests and pastimes to look forward to when you retire. 

If you've never had time for hobbies, you might need to rethink that perspective now.  Ask yourself: Are my current hobbies, interests and activities going to be enough to sustain me and keep me interested and connected in retirement?  If not, spend some time investigating some potential new hobbies and interests.  Try them on to see if they fit.  And don't forget to revisit some of those things that you used to enjoy but which got crowded out of your life by the pressures of work and bringing up a family.

Will you spend more time on community or voluntary activities?

Many retirees like to do voluntary work as a way of giving back to society and providing themselves with a sense of fulfilment and a feeling of being useful.  How much time (if any) would you like to devote to voluntary or community activities in your retirement?  Which voluntary activities do you feel naturally drawn to?  What voluntary activities are you aware of in your area/community?  Which, if any, of these appeal to you?  What's the next step? 

Remember, you can take your time and try out various voluntary activities before committing yourself.  Don't get stuck doing something you don't enjoy because you'd feel guilty if you gave it up.

Will you take more time for yourself?

Many people report that the best thing about being retired is that they can take the time to do all the pleasurable little things that they never had time to do when they were working.  Things like reading the paper from cover to cover, having an extra cup of coffee in bed before they get up, or going to a movie matinee.  What are the 'little things' that you're looking forward to doing?  Make sure you don't get so busy in retirement that you don't have time to indulge in the little things that would bring you pleasure.

Once you get started, you'll probably find you have no problems filling those 2,000 hours.  In fact, you'll probably wonder how you found time to work at all!