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Budgeting for retirement
By Sam Jackson, Investment Adviser with Churchgates
In terms of planning for retirement, adding up your critical expenditures should always be a priority. However, your normal living expenses may vary in the
years leading up to retirement and when you ultimately retire. Here are a few things to consider while budgeting for retirement.
Your weekday spending patterns
The coronavirus pandemic has demonstrated that working from home can save us money. Buying a sandwich for lunch or a cup of coffee in the morning may appear to be little costs in isolation, but they can quickly mount up.
A regular latte, for example, can cost £2.63 on average [1]. Assume you have one every day of the working week. Even halving the amount you have will save you £341.90 per year. That can be a substantial sum of money. Of course, it is
good to indulge in your favourite activities. However, it is always worthwhile to check what you are willing to pay and see if you can generate savings that can be used much more effectively.
The expense of commuting is also a factor. Whether you put £40 of petrol in your car every week or buy a travel card, the expense of travel is one that you are likely to recuperate part of when you retire. However, the amount you recuperate will be determined by what you plan to do with your time after you retire. Perhaps you will go on more day trips that take you further than driving to work.
Consider how your home costs may alter once you retire. If you worked from home during the pandemic, it is likely that you turned on the heating frequently and boiled the kettle more than you usually did during the working week. If you spend more time at home
after you retire, this rise in household bills may become more permanent.
Covering workplace benefits
Do you have a company vehicle? Maybe your employer provides private medical insurance, dental insurance, or life insurance.
If you have benefits like these as part of your employment package, you will need to consider how you will cover them when you leave.
Life insurance is an important consideration. The older you become, the more expensive it becomes. As a result, if you feel you will need cover after you retire, make sure to account for this in your budget.
Unexpected expenses
Depending on your circumstances, your income could decrease or be less stable after you retire. As a result, it is critical to budget for unexpected

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