Retirement is a time of freedom for most people since you no longer have to spend your hours working and earning a living.
But while you’re free to indulge your hobbies and decide what to do with your days, you still need to be smart about the financial decisions you’re making and ensure you adopt good habits.
To help protect your financial security in your later years, here are three habits to put into place before leaving the workforce.
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1. Living on a budget
Careful budgeting is crucial for retirees to ensure they can cover essential expenses. That’s especially true given the fact most seniors have a fixed income and face high costs for medical services.
A budget allows retirees to allocate their dollars to the things that matter most, while ensuring they don’t run short and end up in debt or take too much money out of retirement accounts.
Budgeting also allows seniors to spend more purposefully so they can best enjoy their newfound freedom. For some retirees, for example, having the money to travel or spoil grandchildren is crucial. A budget allows them to identify cuts they can make to free up cash for these purposes.
By getting used to living on a budget before retirement, you’ll be less likely to spend without a plan as a retiree. As a bonus, you can also budget in some extra retirement savings to bulk up your investment accounts before leaving the workforce.
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