Retiree Envelope Budget Template
This retiree template allocates 16% to medical costs and premiums, 25% to housing and property tax, and keeps envelopes for travel, giving, and a long-term care reserve.
The breakdown
| Envelope | % |
|---|---|
|
🏡 Housing & Property Tax
Include taxes and insurance even with no mortgage. |
25% |
|
🛒 Groceries
Smaller household, but food inflation still bites. |
14% |
|
💊 Medical & Prescriptions
Copays, dental, vision, and hearing. |
10% |
|
⚕️ Medicare & Supplement
Part B, Part D, and any supplemental plan. |
6% |
|
🚗 Transportation
Fewer miles, but insurance and upkeep continue. |
6% |
|
💡 Utilities
More hours at home means higher usage. |
8% |
|
📱 Phone & Internet
Phone plan plus home internet. |
4% |
|
🛠️ Home Maintenance Fund
Roof, HVAC, and plumbing over time. |
5% |
|
✈️ Travel & Hobbies
The part of retirement you saved for. |
8% |
|
🎁 Gifts & Giving
Grandchildren, donations, and occasions. |
5% |
|
🏥 Long-Term Care Reserve
Either a premium or a self-funded reserve. |
5% |
|
🛡️ Emergency Fund
Kept liquid and separate from investments. |
4% |
Who this template is for
This set fits retirees whose income is largely fixed: Social Security, a pension, an annuity, or scheduled portfolio withdrawals. Because income does not rise with a raise, the envelopes emphasize predictable categories and reserves for the two costs that grow fastest in retirement, which are healthcare and home maintenance.
How to use it
Apply the percentages to your reliable monthly income after taxes and withholdings. Fund the medical envelopes first, since premiums and prescriptions are non-negotiable. Treat the home maintenance and long-term care envelopes as reserves that roll forward for years rather than balances to spend down annually.
How to adjust it
If you rent instead of own, move the Home Maintenance envelope into the emergency fund or travel. If you have long-term care insurance, that premium becomes the reserve envelope rather than an addition to it. In years with a large medical event, Travel & Hobbies and Gifts are the intended flex categories.
Common mistakes
Budgeting healthcare only as premiums is common, but copays, dental, vision, and hearing are frequently the larger number. Another is having no plan for long-term care, which is the single largest late-life expense risk. A third is withdrawing at a pace set by spending rather than by a sustainable rate.
Common questions
How much of a retirement budget goes to healthcare?
This template allocates 16% across Medicare and supplemental premiums plus out-of-pocket medical and prescriptions. Actual costs vary with plan choice, health status, and state.
Do I still need an emergency fund in retirement?
Yes, kept liquid. Selling investments during a market decline to cover a surprise expense locks in the loss, which a small cash envelope avoids.
What is the long-term care reserve for?
Either paying a long-term care insurance premium or self-funding future care. Building it monthly is far easier than facing the cost as a single decision later.
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