While you are young and healthy, financial planning for retirement and creating a budget for your retirement can seem like a distant chore.

You know you should be saving, but likely have no idea what that really means. It is definitely better to start saving earlier rather than later as this isn’t really something you want to leave to the last minute, at least, not if you want to actually be able to retire and not have to pick up a side job.So how can you know what your saving goals should be? A good idea would be to plan out a budget.

This would let you see how much you would need in income each year, which can help you with setting some goals for your saving plans. Here are some tips to help you with creating a retirement budget.

Figure out what you want

Financial Planning For Retirement

It’s important to consider your goals and your dreams.  Do you hope to be able to travel? What types of locations would you like to travel to?  What type of housing do you want? What about living in a senior’s housing facility or having personal care.  If you have a spouse or significant other, make sure you are including them and taking into account their wishes as well.

Be thorough

When laying out your budget, make sure you take into account all expenses.  While housing and food may be easy to remember, you have to also take into account things like car and home repairs, or health care costs and medicines.  The more thorough you are with your budget, the more realistic and useful your budget will be.

Be conservative

If your expectations and estimates are too optimistic, you will find yourself disappointed and possibly in trouble when it comes time to retire.  Investment funds rarely do as well as you hope, and with inflation and shifts in the market, it can be difficult to meet your savings goals if you haven’t planned accordingly.  So don’t make assumptions with your investments and don’t expect big risks to always equal big rewards.

Financial planning for retirement: Plan for all of the retirement stages

Financial Planning For Retirement

Financial experts often point out that there are distinct phases of financial planning for retirement.  While everyone traverses these stages at a different time, there are some common factors to each that must be considered when you are planning your budget.

Pre-retirement (often somewhere between the ages of 52-62)

In this phase, you are still working, but have likely begun to get a more firm financial picture of your savings and retirement income and thus a clearer picture of what your final budget will be.

Early retirement (often somewhere between the ages of 62-70)

In this phase, you will actually retire. You will no longer be getting that steady paycheck from an employer but have likely begun to see retirement income from pensions and social security.  During this phase, you will likely be using your discretionary fund mostly for activities such as travel.

Middle retirement (often somewhere between the ages of 70-80)

By this time, you will see all of your retirement income.  It is a transitional period where medical and care expenses may begin to outweigh discretionary and travel spending.

Late retirement (often from age 80 onward)

In this phase, your foremost needs will likely revolve around senior housing and personal care.  Even healthy seniors may see their ability levels decrease and require more care. It is very important to plan financially for this stage and the high costs that it can involve.  It is also important to remember that the ages are just estimates and that changes in health or abilities can occur at any time.

Use tools made for financial planning for retirement

Financial Planning For Retirement

Fortunately, along with all of the advances in technology have come advances with easy to use budgeting tools and apps for financial planning for retirement.  Using a budgeting app (like Mint or You Need a Budget) can easily help you with keeping track of your income and expenses, minimizing your need to track everything manually.

Consider speaking with an unbiased expert for retirement planning

As with most things in life, speaking with an expert can give you valuable information and advice to help you with the complex and important decisions that you must make.  So, before finalizing your budget, and particularly if you have questions or are seeing difficulties, make an appointment to speak with a professional financial advisor.

Whether it be helping you with your budget, or helping you with investment ideas, their wealth of knowledge can help you to be able to reach and hopefully exceed your goals.