Which of the following is typically part of financial planning for retirement?

Developing a budget for retirement living expenses is a vital component of financial planning for retirement. This process involves estimating how much money will be needed to maintain a desired standard of living during retirement years. It allows individuals to evaluate their current savings, project future income sources (such as Social Security or pensions), and determine how much they will need to save in order to cover expenses like housing, healthcare, and leisure activities.

Effective budgeting helps retirees manage their finances efficiently, ensuring they can make their savings last throughout retirement. It also enables them to identify potential shortfalls and adjust their savings strategies accordingly. This proactive approach is essential for achieving financial security in retirement, highlighting the importance of thoughtful planning.

In contrast, options that involve buying expensive gifts, investing solely in foreign stocks, or avoiding all investment risks do not align with the comprehensive financial planning needed for retirement. Such actions might divert resources from essential savings or ignore the balanced investment approaches necessary to grow wealth sustainably.