Quote:
Originally Posted by sa226
Presumably if you've saved that amount of money and were financially prudent, then your house would be paid off and you wouldn't have any debt to speak of.
Also if you've saved that amount of money, you wouldn't need to "save" more. Your saving days are over, now is time for your spending days.
Having said all that, what retiree needs 150K a year? The after tax income on that is roughly 100k. So when retired, you're going to be spending 8300$ a month? With no mortgage, no pension or savings deductions, no car payments. Just blowing 8300 buckaroos a month?
Yes inflation, and yes oversimplifiying, but I think we're overestimating retirement income needs.
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It's not completely out of line to suggest that people want that first 10-12 years of retirement to have an income that is about equal to where they are in the workforce though. I generally plan for that first decade to have a lot of spending because people are retired and want to do things they've put off (whether they should put everything off until retirement is a different discussion). But for the first years, they're more active and doing more things which invariably cost money.
As they age, they might spend less on these activities and we plan for that as well. But a key consideration is that we're never planning for people to spend their last dollar and then die. It's completely irresponsible to even consider that. I've clients say "95! I'll never live that long!" and they might be right. But I'm also not planing to call them at 85 and explain that I thought they'd be dead by now and they've run out of money.