A Simple Plan to Keep Your Retirement Money Safe

People who are close to retiring worry that prices will rise faster than their wages. They think the only way to protect themselves is to cut spending, but that can hurt quality of life. A better idea is to design a flexible income plan that keeps pace with inflation. The first step is to look at what you actually earn after taxes and other deductions, not just your salary. Add up every dollar that comes in each month and compare it to what you spend. If the numbers don’t match, decide whether you need more savings, a later retirement date, or a different investment mix. Next, add a small “travel” budget to your plan. Many retirees spend more on trips early in retirement and then cut back later because of health or family reasons.

Treat that travel money as a safety net instead of a luxury. Even ten percent can give you room to adjust if costs jump or the market falls. After you know your needed income and have a cushion, find the gap between guaranteed sources like Social Security or pensions and what you still need. Use that gap to guide your investment choices. If you discover you can retire sooner than expected, it’s because the plan is based on facts, not fear. In short, protect your retirement by: 1. Planning realistic income based on net earnings. 2. Adding a flexible cushion for unexpected expenses. 3. Filling any shortfall with smart investments. Those who build in a travel budget or other spending cushion can handle rising costs better and enjoy a confident, enjoyable retirement.

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