3 Budgeting Tips for New Retirees

New to retirement? Here's how to kick off budgeting on the right foot.

Retirement can be a tricky period of life to adjust to -- even if it is a welcome one. If you're new to retirement, it's important you get into the habit of budgeting right away. Here are some tips for tackling that budget during this new phase of life.

1. Review your spending every month for six months

Being a retiree means a shift in not just your income, but also your lifestyle. This especially holds true if you didn't phase your way into retirement, but rather, went from 40 or more hours of work each week to not working at all.

Having that newfound free time means having to find ways to fill your days. And that might impact your spending. After all, if you're suddenly paying for things like matinee tickets and daytime events, it's apt to put a strain on your income. It's a good idea to check on your expenses month after month to get an accurate sense of what it costs to stay busy as well as keep up with your essential bills, like housing, food, and utilities.

2. Allocate extra money to healthcare

Although healthcare can be quite expensive for workers, it can be even more of a budget-buster for retirees. One big myth about Medicare (which kicks in at age 65) is that it's an inexpensive way to get healthcare. In reality, there are numerous costs associated with Medicare, from paying for premiums to covering deductibles and copays.

There are also a number of health services Medicare doesn't pay for (or at least not original Medicare -- your coverage may be different if you opt for Medicare Advantage as an alternative to original Medicare). For example, dental care isn't a Medicare-covered service, nor are vision exams and hearing aids. You're better off allocating more money to healthcare in your budget so you're covered for what could end up being some surprisingly high bills.

3. Consider part-time work if the numbers aren't looking good

You may put together a retirement budget that's based on your income from Social Security and the withdrawals you feel comfortable taking from your IRA or 401(k) plan. But if that doesn't leave you with much financial wiggle room, then you may want to consider picking up a part-time job.

These days, the gig economy is loaded with opportunities that are flexible, remote, or both. If you're looking at your budget and see you're barely covering your costs from month to month, then it pays to boost your retirement income with some type of job.

Remember, too, that a job won't just give you access to extra earnings. It could also help occupy some of your newfound free time, thereby helping you spend less on entertainment and freeing up more cash for essentials.

Adjusting to retirement can be tricky from a logistical and financial standpoint. Use these tips to budget accurately and effectively early on to set the stage for a fiscally sound retirement.