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Here are tips for setting a realistic retirement budget that doesnt force you to sacrifice your lifestyle.
Identify Your Current Expenses
A realistic budget is often more about expenses than it is about income.
A good first step is to figure out how much youre currently spending.
Add each purchase to one of the categories listed above.
For example, work-related expenses such as transportation and clothing might fall.
Spending on travel and entertainment might increase, as will healthcare costs.
Calculate Your Retirement Income
Your retirement income will likely include Social Security.
Other income sources might include pensions and distributions from your retirement accounts.
Also, remember to include taxable investment accounts and personal savings.
Subtract Retirement Expenses From Retirement Income
This is the moment of truth.
If you have income left after subtracting your expenses, great!
Your budget is OK as is.
But small changes can make a big difference, too.
Review your retirement expenses to see where you might cut back.
Perhaps you could alternate between subscriptions rather than pay for multiple services each month.
Or shop around for better prices on insurance, mobile services and utilities.
You might evenconsider a side gigto bulk up savings now and provide extra income in retirement.
It might take some tweaking to get your budget right.
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