Joe Buhrmann — CFP, CLU, ChFC and senior financial planning consultant at Fidelity’s eMoney Advisor — said most workers, retired or not, tend to commonly spend the most money on Saturday. This is the day of the week often spent running errands, grocery shopping, stopping by home improvement stores or enjoying meals out with friends.
During retirement, Buhrmann said every day is Saturday when you are no longer earning a paycheck. Retirees have a few inflows of funds, like Social Security and pension checks, and oftentimes only outflows and expenses.
After you understand what your monthly expenses are, it’s time to create a spending plan for retirement. Use this plan to track current expenditures and review expenses line-by-line. Determine which expenses will carry over into retirement and which will increase (like travel) or decrease (like work-related expenses). Buhrmann also recommends that retirees ask themselves what they are retiring to and consider their desired lifestyle — including travel, time with family and friends and hobbies — to determine initial retirement expenditures.
After creating a spending plan, use the next few months to see if your actual spending matches that outline. If there’s a big difference, reflect and update your expense sheet.
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