I asked two AI programs the same question. Note the key words in the replies. A budget is forward looking, a plan, it can’t change your behavior. For many people budgets don’t work.
Before you retire you need a basic understanding of fixed living expenses. You obviously need to know your income.
But I disagree that you need a budget or that a budget will help how you view and use your money. The expectations for a budget are overstated.
Here is what AI says:
Is a Budget Necessary in Retirement?
When it comes to retirement planning, the topic of budgeting is often overlooked or downplayed. Many retirees assume that once they stop working, their financial needs will magically align without the need for a structured budget. However, the reality is that a well-crafted budget can be just as crucial in retirement as it is during one’s working years.
Budgeting in retirement serves several important purposes. It helps retirees track their income sources, monitor spending, and ensure that their limited resources are allocated efficiently. Without a budget, it’s all too easy for retirees to overspend in certain areas, jeopardizing the long-term sustainability of their nest egg.
Moreover, a retirement budget provides a framework for adapting to changes, whether it’s unexpected medical expenses, fluctuations in the cost of living, or the need to adjust spending as priorities shift. By having a clear picture of their cash flow, retirees can make informed decisions and make the necessary adjustments to maintain their desired lifestyle.
Ultimately, a budget is a powerful tool that can help retirees achieve financial security and peace of mind. It’s a small investment of time that can pay dividends in the long run, ensuring that your golden years are truly golden.
Source: Rytr
Is a budget necessary in retirement?
Yes, a budget is absolutely necessary in retirement. Here’s why:
- Gives you a financial roadmap: Retirement can last many years, and a budget helps you plan how to make your nest egg last throughout your golden years. It allows you to see how much income you have coming in from Social Security, pensions, and investments, and how much you can realistically afford to spend each month.
- Helps you avoid running out of money: One of the biggest fears retirees have is outliving their savings. A budget helps you track your spending and avoid overspending, ensuring your money lasts as long as you do.
- Allows you to plan for healthcare costs: Healthcare costs can be a significant expense in retirement. A budget helps you factor in these costs and plan for unexpected medical bills.
- Gives you peace of mind: Knowing exactly where your money is going and how much you have left can give you peace of mind and reduce stress about your finances.
So, even if you think you have a good handle on your finances, creating a retirement budget is essential for a secure and enjoyable retirement.
Source: Gemini
Are you ready for the work involved?
Here’s how to get started:
- Identify Your Monthly Income
Identify all sources of income, including wages and salaries and any additional sources such as side hustles or investment returns.- List Your Expenses
List all your expenses, including fixed costs like rent or mortgage payments, utilities, and groceries, as well as variable expenses like entertainment and dining out. Fixed expenses stay the same monthly, and variable expenses change each month.- Prioritize Where You Spend
Determine which expenses are essential and which can be reduced or eliminated to align with your financial goals.- Assign Where Your Money Goes
Assign specific amounts to each expense category based on your income and priorities. Remember to include savings contributions and debt payments in your budget.- Source: https://dfi.wa.gov/financial-education/information/budgeting
QUINNSCOMMENTARY 
These budget articles are a hoot. As an afterthought, “remember to add savings and debt payments in your budget.” Must be written as a school exercise. Debt payments are the reason Dave Ramsey got rich over telling people not to borrow. Of course he also said make a budget and only spend as much as you allocate. I always wondered what his followers did if the grocery envelope or the electric bill envelope didn’t cover that month.
I have to agree with you Brother Quinn that save first along with taxes and then what is left pay monthly expenses. The ability to spend comes into sharp focus if you take care of the essentials first.
LikeLike
One simply needs some common sense when putting their financial life together–before getting married don’t folks, over time, agree on some basics like # of children–religious beliefs and how to implement them–who might be the spender–saver , and so many other things.
When children come into our lives don’t we try to live in a “good” school district–direct them toward healthy activities–encourage them to do well in school and see the value of a good education–lead a moral life, however you define it, so the children have role models, and of course so many other areas.
We make plans whether we know it or not. Some folks like to write it down–some have strict budgets–others sit and talk it out.
We began investing a year after marriage (1968) and have never stopped. What books? What internet? Forbes (John Train–T.Rowe Price columns)–Barron’s–and common sense. Spend less than you earn is just basic common sense–invest in the best companies in the world through good funds (we did) or individual stocks (we never have).
Buy and hold–add monthly–never think you can “time” the market. Folks with crystal balls end up with crushed glass.
Basically, whatever floats your boat. But, we do know things are different today with defined benefit plans a no-no in the private sector. So more does ride on the choices people make. Poor investing or not saving will not be bailed out by a pension, and Social Security is not going to make up for a good pension or a healthy savings/investment portfolio.
For many people today financial survival will be based upon inheritance from the “baby-boomers”–they should be old enough now to be somewhat smart about their inherited assets.
LikeLike
Easier said than done. Articles always share these tips but with so much coming in and out from so many different places it’s difficult to impossible. They never show how or provide tools to help or manage on an ongoing basis.
LikeLike