Retirement is closer than you think - if you manage your expenditure

Managing expenditure in retirement is essential for making your money go further. For retirement planning go to https://ianshadrack.com/retirement-calculator/

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There are three phases of retirement:-
Go Go - where you travel the world and have a bucket list of things you want to do
Go Slow - where you settle down into more of a routine, less need for long haul travel, a second car or expensive home improvements
No Go - where your health is deteriorating, you probably don’t drive a car and you live a slower pace of life

If you understand these three phases you can squeeze more out of the first phase knowing that in later life expenditure will be less. Data from sources such as the household expenditure survey demonstrates that we spend less as we get older, rather than spending a constant amount each year..

To manage your expenditure, first construct a top down budget of take home pay (after taxes and pension contributions) less mortgage and commuting costs less savings into an ISA. This is the starting point of the amount you spend.

You can then construct a bottom up list of what you buy from credit and debit card statements.

If you write out a list of the top 10 things that make you happy, you might find that these things don’t cost much. Compare the list to your 10 biggest bills. Focus your time, energy and money on what makes you happy. If you have a true passion in life you are less tempted to waste money on coffee at starbucks or another pair of shoes.

Some people move between the three phases of retirement based on reaching a specific age. Sometimes the first phase of retirement runs out at a financial milestone such as when an ISA runs out. Other times it is necessary to lower expenditure if you have dropped below the amount of wealth you are targeting and this causes movement to a new phase of your life.

Later life care costs are difficult to estimate, and a lot of people do not incur them. It is useful to hold some money back for such an eventuality.

Chapters
00:00 Three phases of retirement
01:21 Expenditure in retirement empirical data
02:30 Budgeting in retirement
04:15 Moving between the phases of retirement
05:40 Get broke or die trying
07:33 Later life care costs
08:16 Retirement planning to keep on top of expenditure

Видео Retirement is closer than you think - if you manage your expenditure канала Ian Shadrack - Investing