Todd's Tax Service LLC

"The Second Act"

Retirement can be viewed in 2 stages when it comes to planning your retirement finances.


The first phase is a more active phase that may include things like travel, buying new vehicles and toys, and hobbies like golf, fishing, RVing etc.  These things cost money and should be factored in when planning for your retirement. You can plan ahead and pay ahead by having bigger items ready and paid for by the time you retire.  With proper planning, many fulfill their dreams and lead active financially secure lives in their retirement years.


The second phase may be characterized by reduced spending as things naturally slow down.  We don't put as many miles on our vehicles in retirement, so they tend to last longer. We probably won't be buying new golf clubs or fancy suits and dresses when we hit 80. We eat less.  


Everyone's retirement and financial situation is unique, but these generalizations may help craft a plan that makes sense and reduces financial stress. And there are exceptions to every rule! 


Health care (and long term care) are part of this budgeting process. One of the big myths out there is that retirees face astronomical health care costs when they retire and will end up in expensive nursing homes at the end of their lives. What a dire forecast of the end of life! Most retirees do not end up in nursing homes for anything but a short stay if one occurs at all. And medicare reduces financial risk in retirement regarding medical costs. Any responsible budget will of course include funds for out of pocket expenses like eye care, dental care, co-payments, and out of pocket prescription drug costs.