[Slava]

I get asked this question all the time, and as alluded to here by others, it really depends on what your plan is for your retirement. I am a firm believer that there are a few stages though,and the spending in those stages isn't the same. First you have your active retirement where you'll travel, golf, fish and basically do whatever you've wanted to do but weren't able because you were working. The number of years here varies, but I would say goes until about age 75-78. From here its not that you aren't traveling at all, or not longer doing anything, but you tend to slow things down because you're just getting older in general. Spending also declines here as far as those activities goes and you have a much more laid back lifestyle. This goes roughly until age 90-94, at which point you might enter into full(er) time care and live out your days. Clearly the years here aren't the same for everyone, and there is a lot of variance, but my point is that your spending isn't $X per month for X months because you live to a certain age. Its a moving target to say the least.

Its also interesting to see how the concept of retirement has changed over the years. The entire concept is a fairly new phenomena and our grandparents parents probably had very little hope of retirement, until they just could no longer work. Its only in the last couple of generations where this has become more widespread and then a certain company ran around promising to get you there by age 55 which lowered the bar for everyone. I have a lot of clients now who retire and then continue to work for a number of reasons. A lot of times it because they want to work longer; the jobs we hold today aren't as backbreaking as they were in decades past and working as a 70 year old is much easier than it was for previous generations. People identify with their jobs; if they're a lawyer they have a certain self image as a lawyer and that is both hard to let go of all of a sudden, and they just genuinely enjoy it. Rather than flat-out quit, people take on consultancy roles and things like that.

There is another mental thing that takes place with retirement that is probably incredibly difficult to overcome. Its that while you're saving for retirement there is a certain amount of pride you feel in building up that nest-egg for yourself and your family. Now its time to stop enjoying that growth and savings though and start whittling it down. I've never done this first-hand (obviously if you've met me), but have watched a lot of retirees go through this. Its hard. I know that this is where I will find myself when the time comes because I can see the struggle that my clients have with that today and I know how my relationship is with savings and money. Its definitely one thing to joke around about spending every last dime and bouncing your last cheque, but a whole other thing when the account balances decline because they have to and that's the plan.