Retirement with Purpose: How to Spend Smart and Live Well

One of the biggest gaps in traditional retirement planning is the focus on saving and investing—with very little guidance on how to spend wisely during retirement.

Financial advisors often emphasize growing your nest egg, but few discuss how to allocate those hard-earned funds once you finally retire.

I’m not a financial planner, but I’ve spent years thinking about this from a real-world perspective. Retirement is not just about having enough money—it’s about living with intention, purpose, and freedom.

If you want to enjoy your retirement years, a thoughtful spending plan is essential. Here’s a simple breakdown I use, based on seven key categories:

1. Housing (30%)

   You’ll always need a safe and comfortable place to call home. Aim to allocate 30% of your retirement income toward housing. This includes mortgage or rent, property taxes, utilities, and insurance.

   
   

2. Food (10–15%)

   Whether it's dining out or cooking at home, food is both a necessity and a joy. Budgeting 10–15% for groceries, meals, and the occasional treat helps keep life flavorful.

   
   

3. Health Care (15–20%)

   Your health is your wealth—especially in retirement. Plan for 15–20% of your income to go toward insurance premiums, prescriptions, co-pays, and routine care. Significant medical issues may require more.

   
   

4. Entertainment & Hobbies (Varies)

   A purpose-driven retirement means staying active and engaged. Include spending on hobbies, streaming services, club memberships, or creative projects that bring you joy.

   
   

5. Travel (5–10%)

   Revisit favorite destinations or explore new ones. Whether it’s a road trip or a dream vacation, setting aside 5–10% of your income makes room for meaningful experiences.

   
   

6. Transportation (10–15%)

   From car maintenance to insurance and fuel, transportation still matters—especially if you're living independently.

   
   

7. Emergency & Miscellaneous (10–15%)

   Every budget needs flexibility. Use this for unexpected expenses like home repairs, medical bills, or a grandchild’s wedding gift.

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Socrates once said, “The unexamined life is not worth living.” I believe the unexamined retirement budget keeps you from living the life you’ve always wanted. Retirement is your time use it with purpose, plan how you’ll spend, and make every dollar count toward a meaningful life.

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