Budgeting for Retirement
Part of preparing for retirement is having a reasonable understanding of your current financial situation. This includes taking the time to prepare some form of written budget with planned savings being included in the budget for retirement purposes. The purpose of the plan is also to identify areas where you have subjective spending that could be curtailed and redirected toward retirement needs if initial assumptions appear to leave you short of your retirement goals. Additionally, keep in mind that emergencies can and will happen, and by planning ahead and having some flexibility in your budget, you will be able stay on track despite bumps in the road.
Scottrade's retirement calculator is a good place to start.
By using the retirement calculator, you are able to adjust and measure your initial assumptions about retirement. Take the time to measure the differences in your retirement outcomes based on working and saving longer, adjusting your portfolio's asset allocation or by increasing your level of savings. Doing so will be beneficial to designing the appropriate asset allocation and diversification of your retirement portfolio.