2. Map out a retirement budget

retirement savings illustration

Maybe you're used to following a budget and tracking your spending diligently. While that's certainly a positive habit to celebrate, once you stop working, your expenses are likely to change — for better and for worse.

While you might save money on things like commuting and transportation (retiring might allow you to downsize from a two-vehicle household to a single vehicle, thereby saving money on maintenance and insurance costs), you might spend more money on things like leisure, since you'll have additional free time on your hands.

Before you retire, create a new budget that details the expenses you expect to encounter once your career comes to a close. You'll probably have to tweak that budget as you go along, but having one in place will give you a good sense of whether your nest egg will suffice during your golden years, or whether you'll need to save more money before making your retirement official.

First published December 6, 2018: 4:07 PM ET

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