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Retirement & Planning
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How are my expenses likely to change?


While one school of thought says you'll need 75% to 80% of your current income once you retire, it may be safer to assume you’ll need roughly the same annual income you have today.

This next chapter in your life can be an exciting time, but now more than ever it's important to have a realistic picture of your expenses. Can you count on spending less than you do now? While some expenses will go down, others will go up. For example, in a recent poll, almost half of retirees said that health care costs were higher than expected.1

How your expenses may change
Costs that may decrease: Commuting, weekday lunches, business gifts, retirement savings, business extras, clothing
Costs that may increase: Medicare and Medigap premiums, medical care deductibles, long-term care, travel, leisure and hobby activities, volunteering, gifts and entertainment

What's your number?

In a recent poll, a majority of retirees said that they were spending at least 70% of what they spent before retirement, and many said they were spending 100%.1 For your own rule of thumb, consider how you plan to live.

Percentage of current income minus retirement savings
100%–120% You plan to live it up— you have lots of travel plans and a wish list of expensive toys.
80%–100% You're maintaining— you like your life now and just want more time to enjoy it.
60%–80% You're downsizing— maybe you're finally debt-free or moving somewhere less expensive.

Retiring soon?

If you'll be retiring within a year, it's time to get even more specific about costs by preparing a line-item budget that estimates all expenses and income sources. We recommend that you list expenses in two categories: essential and discretionary. Doing so will help you manage and monitor your expenses, and make adjustments more easily.

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