Are you ready for retirement?
It is a well-known fact that we are currently experiencing a high inflationary environment, which puts a higher stress on cash flow needs. How accurate would you be if someone asked what your monthly expenses are?
One of the main variables in a financial forecast are monthly living expenses. It is a particularly crucial variable because miscalculating even $500 per month can potentially hinder a plan in the long run.
In order to prepare for retirement, here are a couple of things you should ask yourself:
Are you able to estimate your monthly expenses accurately?
This involves diligently tracking your expenses via a spreadsheet, app or simply sitting down and writing out all your expenses on a consistent basis. It may be tedious and boring, but we can confidently say it will pay dividends in the accuracy of your financial forecast.
Do you expect your living expenses to decrease in retirement?
Many individuals are under the common misconception that their expenses will decrease during retirement. Often certain things are not accounted for, such as increased medical costs, potential new hobbies, additional travel expenses, assisted living facilities, and large one-time expenses such as children’s weddings/gifts and new car purchases.
While you may find retirement planning to be a stressful process in the beginning, consistently updating your financial forecast, and ensuring all variables are accurate will be the best way to safeguard your retirement for unexpected expenses and market volatility.
If you are contemplating retirement, please do not hesitate to contact us, as we will run an in-depth analysis of your financial situation to help determine what retirement looks like for you.