4 tips for a happy retirement

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Retirement planning is an essential process that can be divided into two stages. The first stage is to plan how much you are going to save, including what you will invest in to increase size of the money you have set aside. At High Dividend Opportunities, we use the income method to help identify what to invest in. We work on creating a portfolio of investments that pay dividends or interest, providing an income stream ready to use when you retire.

The second part is just as important and much less fun. It is the budget for your retirement years. By setting a budget, you determine how much cash your savings should produce in a year. This, in turn, will determine how much you save and what you buy.

The process is iterative in part because your portfolio size and budget are only estimates. Your portfolio estimate may produce too little income to cover your proposed budget. If that’s the case, then you’ll need to find a way to increase your income or revise your budget and cut less important expenses.

Every year, both as you near retirement and afterward, you’ll need to update both your budget and your portfolio. This will allow you to make any necessary course corrections, which is essential if you want to be successful.

retirement is like this Very expensive

People approaching retirement are often told that their expenses in retirement will be about 70% of their pre-retirement expenses. This advice is based on the fact that you won’t be driving to work every day, you won’t need to spend money on clothes for work, and you’ll eat lunch at home more. Some will also say that you will no longer save for retirement. This is terrible advice. Do not believe it.

All of this ignores a very important fact about retirement: You are likely to spend more money. There’s a reason they say time is money. In retirement, you’ll have so much more, since you’ll no longer spend 8 or more hours at work each workday.

This extra time can go a long way: you’ll have time for new hobbies and time to travel. All of that costs money, money you didn’t spend when you were a full-time worker. I often tell my wife, “Either I spend money or I earn it.”

Other challenges you will have are inflation and rising medical expenses. Your huge pile of cash will seem smaller over the decades. Then, as you reach your 70s, 80s, or 90s, you’ll find that you know a lot more doctors by their first names. You will also find that doctors are well paid.

So while some of your expenses may decrease when you retire, there are plenty of things to spend money on that you didn’t have time to do when you were working.

The first step in retirement planning is a realistic budget that takes into account all the things you’ll do in retirement.

It happens, you can bet the farm on it

It’s a fact of life that the unexpected will happen, that doesn’t stop when you retire. So you need to plan for unexpected expenses: the roof may need to be repaired, the septic tank replaced, pipes may burst, and medical or dental problems may arise.

First, set up an emergency fund with about 6 months of expenses plus any other emergency cash you have. As you spend it, top it up again with income from your portfolio. Just like the gas tank in your car, it’s essential to have a reserve to keep it moving.

Also, include flexibility in your monthly budget. Many people find it works well to have about 10% of the total budget unallocated so they have the cash to pay for smaller one-time needs.

As you age, the people you love and care about age too. One thing you can expect to happen at unpredictable times is lifelong friends and family developing health problems. It could be a child who has a baby, an elderly parent who falls and needs help recovering, or an old friend who is terminally ill. You do not want money to be an obstacle that prevents you from being present in those situations.

Take advantage of the unexpected by creating wiggle room in your budget and by having an emergency savings account for your retirement.

Regularly review your budget

Budgeting is not a one-time effort. You will need to review it periodically. Look for expenses that no longer meet your needs.

For example, that streaming service that had a couple of series that you wanted to see and a lot of good movies may no longer have those series or good movies that you have not seen or it may be that a different service is better for you now or offers a best price.

It could be that what was once a one-time expense, like flying to Florida when your dad went down, has become a more regular event. If you now fly to Florida once a month to check on him, you should add it as a regular budget item instead of taking it out of the “shit happens” money.

For the most part, retirement specialists recommend doing a review once a year. With inflation so high, it might be more prudent to do it twice a year.

Once you’ve reviewed your budget, you can review your portfolio and plan to generate the cash needed to cover your budget.

Focus on what is most important to you

Before retirement, most people are more limited by time than by money. After retirement, this is reversed. There is much less restriction of time and more of money. So make sure you spend your money in the way that is most efficient for you. Get the most out of your money.

Since you’ll have time, explore how you’d like to spend your time. If you haven’t traveled much, take a package tour to see if you like it. Visit with relatives. Go to Florida if you like sun and beaches. Go to New Mexico or Arizona if you like deserts or mountains.

Many retirees like to spend time on their hobbies. They have time to play golf, go to the casinos, maintain collections, work on old cars, etc. Will your hobby be expensive? If so, is it worth it? Fortunately, although many hobbies are expensive, some can produce a small income. I have a friend who likes to buy rusty buckets and turn them into work vehicles that he then sells on Craigslist. There is plenty of time to search garage sales for those rare and valuable items. I like to write, so here I am. What will you want to do? Will it cost money or make money?

Pets can be a great option for retirees. They can take up a lot of your time and provide you with constant company, especially if you are single. If you travel, it can be quite expensive to board them. But then again, it’s all about spending the money in a way that brings you the most joy. If you like to travel and do it a lot, a pet might not be a good expense. If you enjoy your pet and travel to places where you can bring them (many hotels will allow you to bring small pets with a cleaning deposit), that will work too.

Where will you live? Many retirees build their “dream home” only to find out they don’t actually use thousands of square feet of space. What was a “dream” when they worked and had a house full of children can feel very empty when the children move on with their lives. Downsizing can be a great way to cut costs and have a space that is easier to maintain. Some retirees like to move to areas with a lower cost of living or even move to another country. Others cannot imagine leaving their “hometown”. No decision is “right” or “wrong,” but these decisions will have a big impact on your spending in retirement.

The key is that you want to have an idea of ​​what your day to day will be like. Your preferred lifestyle will have a huge impact on the amount of income you need.

You still need to save for the future

Many people underestimate how long retirement can be. When you’re 30, 65 sounds “old.” When you are 65, you may have another 40 years to live and finance. The last thing you want is to outlive your retirement.

You still have a future, you will still have financial needs in that future. So when you retire, don’t forget to include a plan to reinvest a portion of your income. By reinvesting, you ensure that your income grows every year. Helping you keep pace with inflation and ensuring your retirement never runs out.

dream time

dream time


If you’re reading this, then you’ve already decided to manage your own retirement portfolio. That’s usually an indication that you enjoy it, or at least are interested. I think managing a portfolio is fun. It’s a hobby that can make money, can take up a lot of time, and can make your retirement more fulfilling. So it’s something we love to think about, talk about and debate.

Making a budget is not so entertaining. No one really wants a budget. Wouldn’t it be great to have infinite money and never have to worry about budgeting? The reality is that we must plan our budgets with the same diligence that we put toward our portfolios. It’s not that fun, but it’s necessary.

Spend the money wisely and for your best benefit. You don’t have to make anyone but your spouse happy with your retirement expenses, so be sure to spend money on things you enjoy or that benefit you.

Make sure you’re prepared for retirement expenses. Nobody likes to pay for health insurance, but making sure you have good coverage will benefit you. Prioritize maintaining an emergency fund. Make sure you are still booking for the future.

Regularly review what you are spending your time and money on. Make sure they give you the same level of enjoyment as they did in the past. If they don’t, look to spend your money elsewhere (or just stop spending).

Once you have a preliminary retirement budget (or have finished reviewing your regular budget), then you’ll know where you’re headed and can build your income portfolio to achieve that goal.

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