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Retirement is a time to enjoy the rewards of decades of hard work—but it’s also a phase of life that requires thoughtful financial planning. In this episode of Retire Well, Matthew and Joe explore how retirees can balance their desire to enjoy life now with the need to ensure long-term financial security.
One of the biggest challenges in retirement planning is estimating how much income you’ll need. Many people assume they’ll spend less once they stop working, but the reality is often more complex. The early years of retirement can be filled with travel, home improvements, and lifestyle upgrades that increase spending.
Joe highlights this trend:
“A lot of people in the first few years of retirement start to spend a little bit more as they’re doing the sort of things they want to—the key holidays or upgrades to the car.”
Understanding your spending habits and how they might evolve is key to building a sustainable retirement plan.
A helpful way to approach budgeting is to break down expenses into three categories:
This framework helps retirees prioritise spending and prepare for unexpected changes in income or expenses.
Cash flow planning is one of the most powerful tools for retirement budgeting. It allows you to model different scenarios such as market downturns, health costs, or family support and see how they affect your long-term financial picture.
Matthew shares a practical tip:
“What I love to see is people almost pretending they’re retired when they’re still working—moving an amount of money from one account to another to say, ‘Ignore my salary. This is how much I think I’m going to need to live on in retirement.’”
This kind of simulation helps build confidence and clarity before making the leap into retirement.
Retirement plans should be flexible enough to accommodate life’s surprises. Whether it’s helping children with tuition fees, supporting family through difficult times, or funding private healthcare, these costs can significantly impact your financial future.
The key is to build in buffers and avoid relying too heavily on optimistic assumptions. Stress-testing your plan—by factoring in inflation, market volatility, and one-off expenses—can help ensure your retirement remains secure and enjoyable.
Retirement budgeting isn’t about restricting your lifestyle—it’s about empowering your choices. By understanding your spending, using tools like cash flow planning, and preparing for the unexpected, you can enjoy retirement with confidence and peace of mind.
If you want a better view of what your future could be, we'll have a chat and work out if we make a good fit for you and your financial picture.
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