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“... create a retirement budget based on what you currently spend and how you foresee that changing. [Here’s a retirement spending worksheet for that very purpose.] Michael Garry, a certified financial planner in Newtown, Pa., says clients who do that often enjoy the added benefit of finding financial leaks they can plug right away. ‘A lot of people haven’t done a budget in years,’ he says, ‘so they’re sometimes shocked at how much they spend eating out or on different kinds of memberships.’
“In projecting your retirement expenses, consider whether you plan to stay in the same home and if you’ll still be carrying a mortgage. Also take a look at health costs, particularly if you’ll no longer be on an employer’s plan. Bear in mind, for example, that Medicare, great relief that it is in many respects, doesn’t cover most dental bills. While you’re at it, don’t forget to budget for some fun, however you define it.”
—Greg Daugherty
Greg writes the “Retirement Guy” column each month in our Consumer Reports Money Adviser newsletter.
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