6 Things to Budget for Now If You Plan to Retire

Did you know that over 46 percent of Americans have less than $10,000 saved for retirement? Not planning for the future is one of the easiest ways people fall in debt, and unless you plan to work well into your 80s, you should start taking a more active approach to your future today by planning for it. It doesn't matter whether you’re 15 or 50, saving for retirement today can help you live a better, less stressful tomorrow.

1. Long-term care costs

While most people plan on retiring in their mid-60s, people are living longer, which means that age-old retirement plans just aren't cutting it anymore. In fact, the average American now spends over 20 years in retirement.

Don't underestimate long-term healthcare costs, as studies show it can cost around $100,000 per year to live in an assisted living center. Insurance can sometimes help alleviate these costs, but not always. If you have a family history of debilitating illness or a chronic medical condition, make it a priority to budget for higher assisted care costs. 

2. Medical emergencies

It's hard to budget for unexpected medical costs, especially since you never know what's going to happen, but you should have some money reserved specifically for medical emergencies. At the very least, a good rule of thumb is to try to have enough saved to cover the cost of your highest deductible. 

3. Debt resolution.

If you're dealing with more debt than you can handle, you're not alone. In fact, the average American household is over $15,000 in credit card debt. If you’re struggling to make ends meet, you may want to consider using a site like Creditguard.org to help lower your outstanding rates and plan a budget you can stick to.

4. Day-to-day costs

In addition, budgeting for everyday costs, like buying food and paying the utilities, is important as well. It’s easy to forget about these things when you are pulling in a steady paycheck, but they can become very expensive when your fixed income is gone. Keeping track of regular, day-to-day expenses is one of the best ways you can plan for your retirement budget. Consider free sites like Mint.com to help you prioritize and budget.

5. Property taxes

Though property taxes vary by location, it’s important to budget for these as well. The government will take a portion of the value of your land through property taxes. Make sure that you budget enough to pay for the average cost of these taxes, which can change based on property values. Since property value is often correlated with your local real estate climate, keep an eye on the housing market in your area to make sure your property tax budget will remain sufficient for years to come.

6. Insurance policies

There will probably be a number of insurance policies you'll want to retain during your retirement. These could include home insurance, car insurance, health insurance or life insurance plans. Unfortunately, the fees themselves aren't the only things you should budget for; extra expenses like vehicle maintenance and home improvements should also be factored in. It is important to prioritize your insurance expenses; if your budget is tight and there are a few policies you can live without, consider ending these and focusing on only the essential plans.

There are many expenses to plan for in your retirement budget, even excluding major costs like a mortgage or a car payment. That's why it's so important to plan ahead so that you are ready for the financial changes to come when you retire.

This article was co-authored by Maria Rivera, who has spent the last 13 years helping people overcome their financial hardships. She currently manages CreditGuard of America’s credit counselors and helps prepare individuals who are seeking their credit counseling certification. A resident of Boca Raton, Florida, Maria is always on the lookout for great new recipes and beauty tips. She's also a self-admitted pop culture junkie. You can follow the latest from Maria over on Google+.