Curating the best savings strategies for retirement is on the mind of every financial planner, and the people they consult. Regardless of specialty, almost every financial planner hears one common question: how much money do I need to retire?

While it is impossible to nail down a concrete number due to each person’s unique financial goals, a quick internet search will tell you that many retirees will need over 1 million dollars.

This number stops many people in their tracks. 1+  million dollars?  Your unique number depends on many factors including your projected income, the size of your retirement investment portfolio and how much you plan to spend.

If 1+ million dollars is concerning to you, take comfort in the fact that about 50% of Americans have nothing saved for retirement. Even if you are just beginning your retirement savings, know that saving takes time and discipline to be successful. This discipline can take many forms, most traditionally it takes the form of a retirement budget.

A House Is Not a Home

One of the first things you should consider when planning your retirement budget is your housing situation. Dedicate some time to think about options that would work for you: keeping your old house, downsizing to a smaller place, or moving in with family.

I encourage people to estimate their budget based on their current spending habits. Often, the cost of living in the transition from full time work to retirement remains relatively static, therefore it is wise to budget for your current cost of living.

People often think that they will automatically spend less money in retirement. When you retire, you may want to travel more, remodel your home or go out to eat more regularly which could increase spending. Retirement also leads to an increase in spending on medical procedures. In order to avoid overspending, be sure to estimate for your projected costs of travel, remodeling your home and medical expenditures upfront.

Purging Comes In All Shapes and Sizes

In order to create a workable retirement budget for yourself, it is important to start decreasing your expenses now. This will allow you to have more money to be able to do the things you have always wanted, like sitting under the Eiffel Tower as it glitters at night.

A great way to pare down your expenses now is to focus on any debt that you have. Take a critical look at your mortgage payments, student loans, credit card debt, anything that could stand in the way of you contributing to your retirement savings.

Being intentional about your spending– and savings– habits allows you to take control of your finances as opposed to your finances controlling you.

If Money Grew On Trees…

How will you make money during retirement? What are your guaranteed sources of income? Identifying and quantifying these questions will be crucial in the making of your retirement budget.

Looking at things like social security, pension plans, and part-time work will help in determining how much money you will anticipate coming in each month after you retire. There are ways to calculate the amount of money you can anticipate to receive from Social Security payouts, like this one from AARP.

An Apple A Day

I know you want to keep the doctor away for as long as possible, but simply eating an apple every day may not cut it for you in retirement. On average, a 65-year-old couple will spend about $240,000 in medical expenses during retirement, according to AARP. While this number is not representative of everyone, it is good to concretely understand the gravity of the situation.

Medical bills are a reality for all retirees. Out of pocket medical expenses creep up when you least expect them: copays, prescriptions, eyewear, hearing aids, and premiums. Though insurance will be able to help, it is best to overestimate your medical expenses when planning for retirement.

Do Take It Personally

Creating a retirement budget is dependent upon you and your needs so don’t be afraid to get personal with your savings strategy. It can be easy to use boilerplate templates and generic resources, but if you are able to customize your budget to your specific lifestyle and resources, you will be more successful. When making your retirement budget, think about these three questions:

• When are you going to retire?
• Where are you going to spend your retirement?
• What are you going to do in retirement?

These questions are unique to you– no template will be able to fill in the blanks. Use your answers to go deeper into your budgeting, planning, and strategizing. Your retirement budget should be unique– just like you!

Pick a Number

Let’s recap. You know that retirement can get expensive and that the best way to account for that cost is planning. Customizing your budget to match your lifestyle and resources is the best way to plan for a successful, stress-free retirement.

If you are still feeling overwhelmed by the numbers, not to worry! A financial advisor would be more than happy to talk with you and help you generate the best savings strategy for you so that your retirement is a happy and healthy one.