3 Things You’re Missing from Your Retirement Budget

May 25, 2017

If you’re forgetting these three things in your retirement plan, it might be time to reassess your finances.

It’s the Canadian dream to retire at 55, however this isn’t attainable for everyone. A wise man once said, “Shoot for the moon, because even if you miss, you’ll land amongst the stars.” According to Stats Canada, the stars, or in this case the median, is retiring when you’re in your early 60's.

Building your post-career life starts with creating a practical plan that will help you live comfortably with your saved money. It isn’t easy to anticipate every expense when you’re preparing for your retirement. In fact, most Canadians will typically overspend during the first initial years of not working. If you’re forgetting these three things in your retirement plan, it might be time to reassess your finances:

1. Family

Retirees often forget to budget for family expenses. It’s important to adjust your retirement plan so that it includes extra savings for children who fall into financial trouble or elderly loved ones who might need help in the case of a medical emergency. Anticipating any future expenses that might involve your generosity towards immediate family members will ensure that you can help without having to drain your bank account. Preparing for this possibility will be a wise decision, especially if you have older parents or kids who aren’t totally stable in the financial department.

2. Life

Life’s unexpected complications will arise when you’re retired, so it’s important to address things that could change a family dynamic and seep into your savings account. Marital splits, acquiring assisted care, auto repairs, home renovations – these are just the tip of the iceberg when it comes to life’s complications. Given the fact that you could be retired for decades, there’s a good chance that you’ll run into one of them, so make sure to keep these things in mind when you’re making your budget, because a little bit of financial preparation will go a long way.

3. Health

As we age, we require a little bit more assistance when it comes to our personal health. If your employer had medical benefits while you were working, you might not be eligible for health discounts once you’ve stopped working. The average Canadian will spend over $5,000 for medical expenses every year after the age of 65. Things like hearing aids, prescription drugs, long-term care and products to help mobility purposes are all things to consider and plan for.

It’s not uncommon for a person to continue working to meet financial goals for their retirement plan. Avoid mistakes like going into retirement with a lot of debt, withdrawing unnecessarily large amounts of money, or underestimating how much you’ll need in case of an emergency. Your retirement could last up to 30 years, so it’s crucial to plan accordingly so that you can stretch your dollars for a long time.

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