I have been struggling the past few months to answer retirement planning questions for people who don’t know how much money they need to sustain their lifestyle in retirement. It’s not that I don’t know the answer; I’m struggling because they don’t know how much money they are currently spending.
Can you see the predicament here? How am I supposed to know how much money you’ll need to retire if you have no idea how much you are spending now?
I wish this was an uncommon event for me, but unfortunately, I have this conversation at least once a month.
Here’s my solution to this problem. I’m providing a budgeting spreadsheet for anyone who wants it. It includes every major expense category I could think of. In addition, each category has a cell marked other for anything I might have missed. Simply send me an email and we’ll send it to you.
So, if you are wondering how much money you will need to maintain your lifestyle, you may want to use the spreadsheet to keep a journal of your spending. After two or three months, you should have a much better idea of how much income you need to live your life, or at least how much you need to live the life you lead right now, and that’s a great place to start. Once we know what your needs are, we can start to figure out how much money it will take to generate the income you’ll need. (Click here. . . this is the next post to read.)
Before I end this post, I’d like to make the suggestion that you may want to update your spreadsheet once a week. Waiting until the end of the month can be overwhelming with the large number of transactions most of us have in our modern lives. The good news is that with online banking, the task is much easier than balancing a checkbook back in the day.
As always, feel free to call or contact us with any questions you may have.