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Budgeting, Finance Planning, Retirement Planning

Learning to Live Within Your Means

Learning to Live Within Your Means – This is good advice when you are accumulating wealth and saving for retirement. However, what does it mean once you are retired?

More than likely the principle is still the same, but a modification needs to be taken into consideration with regards to the resources that are available during your retirement such as accumulated savings and possible social security benefits. So perhaps it is more likely “Avoid spending beyond your means”. That is to a level you can afford whilst at the same time enjoying your retirement.  It’s a matter of “don’t spend too little or too much”

  • Spend too little you could limit your enjoyment.
  • Spend too much and you reduce the quality of your later years.

The key is knowing how much can be spent, this can be achieved through retirement forecasting to help work out what is too much or even too little.

This is often considerably different from person to person as we have found people often don’t spend the same each year, which is often the assumption in most retirement forecasting.  We work diligently to modify your lifestyle spending to your own preferences such as impermanent capital spending like an important medical expense, vehicle purchase, home renovation/improvement or a substantial trip/holiday, bucket list events etc…

With these types of expenses in mind we can show the chances of a retirements nest eggs success.

It is important to understand the game is constantly changing that is the game called life and the good thing is that adjustments can and need to be made as you go.  If you have some flexibility in your spending habits, you can adjust your spending as real life progresses.  For instance, if you get better investment returns than you expected, you might be able to spend a bit more.  Conversely, if the markets go through a rough patch, cutting back a bit on the nice-to-haves may keep your retirement plan on track.

Life’s full of changes and we recommend checking your retirement forecast regularly, at least on an annual basis.

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