I'm just about to enter retirement, and I'd like to hear about budgeting for fixed-income couples. There are different priorities for retired couples than for families or young couples just starting out. Plus there is the adjustment to lowered income and different lifestyles.
One idea that I have heard is for the potential retiree to "try retirement before actually going into retirement". By this I mean that for a short period of time the potential retirees `reduce' their usable income to make it approximately match what they will be receiving after retirement. Just take that regular take-home pay and place the amount that it will be reduced by retirement into a savings account and DON'T touch it. Do this long enough to `feel' the changes necessary for living on that retirement income. See what lifestyle changes you have to make due to income changes. Can you live with it??? A pleasant side effect to all this is that once you have went through several months of this scenario, you have a nice little lump sum savings that is now available to help supplement that reduced retirement income.
Also remember that there are some pre-retirement costs that you'll no longer incur, but there are retirement costs that you probably haven't had before or are greater than they were before retirement. One area that usually surprise the retirees is the `cost' of their leisure time. Whether it be gardening, golfing, reading, there are associated costs that usually result in increases during retirement due to the greater amounts of time that is being spent on that activity. Some ways to reduce these costs are to do a joint garden with your next door neighbor and/or share tools; buy a golfing discount card (a good one is the "the Lung Card" ($25) being offered through the American Lung Association which covers the green fees and you cover the cart rental; and using the library for a large portion of your reading materials (do you really need all those magazine subscriptions or can you read through them at the library and copy those parts that you really want to keep? (make a few subject/activity organized notebooks))
It's a Beginning
Don't think of "retirement" as the final stage of life. Think of it as the beninning of a whole new adventure. For the first time in your life, you don't have to answer to anyone. You don't have to get up to go to work. If you don't feel like dusting the furniture today, don't! It's your ball game and you decide what each day will bring. Just don't go into hibernation, waiting for "the end" or you'll be missing what can be the best part of your life. Financially, the change does take some getting used to, but although your income is lower, so are your expenses, and the two balance out.
It took me months to "adjust" to this life style. If I went to town on a Tuesday, I'd feel guilty and would look around to ensure nobody from the office had spotted me, or I'd feel terrible pangs of guilt because in my mind I knew I should be at work and not goofing off! A year later, I don't care. The guilt is gone and I feel marvelous!
First, make a list of all of your expenses, fixed and variable. There is nothing you can do about fixed expenses, but a lot to adjust variables. Then compare to what you will be receiving as retirement income. You will see whether you have enough or if you have to start cutting expenses. Ask yourself, do I need it? before you spend any money. If I don't buy it, what will happen? If I have to have it, will I use it a lot or just a few times a year? Can I borrow one if I need it? Could I rent it? What about flea markets, yard sales, second hand stores, pawn shops? If someone is going to buy me a gift, could it be this? There is a lot you can do to live well on less. We do. My husband gets just social security. I work at just above minimum wage. We love to go out to eat several times a month. We have nice things in our home. We have emergency money. We really want for nothing. I have a cat who eats Fancy Feast, gets his shots/vaccinations and goes to the vet when ill. I have nice clothes. Our car and truck are paid for. I have no bills and pay cash or by check. It's not how much you make that counts but what you do with what you have that pays off.
My parents are retired, sort of. Mom is fully retired and Dad was too until Mom realized how "doing nothing" was so hard on Dad. Dad now works part-time so he keeps busy with that and his garden. I guess they married each other for better or worse, but not for retirement! I have heard the very same thing from a doctor's wife. Keeping busy is the best thing you can do for yourself and your spouse!