Create a retirement budget—and try it out now

Last reviewed: May 2009

You can see how far your money will go once you retire by creating a retirement budget, based on your probable income, then trying to live on it for a few months. If you discover that your money doesn't stretch far enough no matter how hard you tug, you'll probably need to make some changes.

Some of your expenses will drop when you retire; others might head in the opposite direction. You might spend less on clothing or restaurant meals, for example, than you did when you were working full-time but more on hobbies, recreation, and vacation travel. Your various sources of income will probably rise or fall as well. The worksheet below can help you look ahead—and maybe avoid some unpleasant surprises.

Monthly income Before retirement During retirement
Your gross pay    
Spouse's gross pay    
Your Social Security benefit    
Spouse's Social Security benefit    
Your pension income    
Spouse's pension income    
Investment and savings income    
Total monthly income    
Monthly expenses    
Federal income taxes    
State and local income taxes    
Social Security and Medicare withholding    
Retirement-plan contributions    
Housing (mortgage payment, rent, property taxes, home insurance)    
Utilities, telephone, and Internet access    
Groceries and toiletries    
Prescription drugs and other out-of-pocket medical    
Car payments and insurance    
Gasoline and car maintenance and repair    
Public transportation    
Health, life, disability, and long-term-care insurance    
Clothing and dry cleaning    
Restaurant meals and entertainment    
Vacation travel    
Credit-card and other loan interest (not including mortgage)    
Total monthly expenses    
Monthly surplus or gap