One of the good points about retirement is you no longer have to worry about saving into a pension.
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A pension is just one of several bills that change with the witch from working to staying at home.
That’s why trying to work out how much money you will spend in retirement is so hard.
A lot of bills change – like travel, lunches, coffee and other work related costs.
At the same time others increase – such as utility costs because you spend more time at home.
The trick is predicting which go up and which go down.
Here are five that change dramatically:
Whether this is having someone come round to your home to help with meals, cleaning and dressing or paying out for a care or nursing home, at some stage you will have to pay for day-to-day support
Pensions and retirement saving
By the time you retire, you either have enough cash or not, so there’s no point worrying any more.
The focus switches from saving to controlling spending to make sure you have enough cash to last as long as you do.
The cost of cover increases the older you get, but the reality is you do not really need expensive life or income protection. These policies are designed to protect your spouse or loved ones from unexpected financial shocks when you are working and cannot replace an income.
Unless you have a significant income or plan to spend a huge amount of money in retirement, tax should not be that much of a worry.
If you have a spouse, shuffle those incoming generating assets between you as no capital gains tax is incurred and maximise both your income tax reliefs and allowances.
Hopefully, your mortgage, loans and credit cards will be paid off before retirement.
This will make a big difference to your monthly budget. Sorting out a reliable car is also worth thinking about.
How much you spend on running the house will depend on how you while away the time. Some stay at home, others keep active and are hardly there.
How much you need also depends on how long you expect your retirement to last. That could be up to 30 years for the average 65-year-old.
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