Budgeting for Your Retirement Lifestyle

As you start planning your retirement, one of the questions you may be asking yourself is: do I have enough money to retire and how much will I realistically need? The answer to those questions depends on the cost of the retirement lifestyle you envision, and that entails creating a detailed, realistic, retirement budget.

What’s Your Retirement Plan?

The lifestyle that you choose in retirement will determine not only how much money you spend, but also how much money you’re bringing in. What are your retirement goals and dreams? Will you keep working? Start a business? Volunteer? Travel? Spend more time at home with friends and family?

Each of these decisions will have a bottom line impact on your retirement budget, so start by examining your spending today, and think about how that might change in retirement.


Do you plan to stay in your current home or downsize? If you own your current home, will you be mortgage-free when you retire? These decisions will impact the following expenses:

  • Rent or mortgage payments
  • Property taxes
  • Maintenance
  • Home insurance
  • Utilities


If you currently own a car or two, will you keep them in retirement, get by with only one (you may no longer be commuting to work), or get rid of your own cars and use a carshare or rideshare service, or public transit? These decisions will impact your transportation budget and amounts for:

  • car loan/lease payments
  • insurance
  • gas
  • repairs & maintenance

(Note that in most cities, seniors get a discount on public transit fares.)


This category is totally discretionary and can range from minimal to maximal, depending on whether you plan to spend most of your time close to home (or cottage), or if you plan to use your retirement to travel the world.

Food, Entertainment and other Discretionary Expenses

Depending on the retirement lifestyle you choose, you may want to budget more money (or less) towards eating out and entertainment. Some entertainment, like going to the movies, is less expensive for seniors. With more leisure time in retirement, you may be able to take advantage of rush tickets to the theater, the opera or the ballet, which are often heavily discounted, or attend less expensive matinees.

You may also want to budget more money for club memberships (gym, golf, tennis) and other hobbies.

Work-related Expenses

If you’re no longer working, you can eliminate work-related expenses from your former budget, like the cost of commuting to work, “work clothes”, and eating out.

Financial and other Fees

Will you be retiring debt-free? Then you don’t need to budget for debt service payments. In retirement, you may be entitled to a discount on your banking fees, as well as fees and dues if you belong to a professional or trade association.

Health care and Insurance

Don’t forget to budget for the rising cost of health care as you get older. It’s also wise to review and update your health, disability, life, and critical illness insurance policies. 

Save Even More

Finally, did you know that members of CARP (formerly known as the Canadian Association of Retired Person – a non-profit organization for seniors) can save “hundreds of dollars every year” on a host of goods and services, including insurance, travel, phones, fitness and household services?