The numbers people put might seem excessive, but frankly it depends on how they live before retirement and what they want to do. Let’s say you’re retiring at 60. People have touched on needing to do things, and let’s be honest most of those things cost money. I also think that if you have a household income pre-retirement of say $150k, to suggest you would spend nearly that from age 60-70 isn’t insane. Not many people would retire at 60 and dial back from the $150/yr to say $50/yr and be thrilled with that. Could you do that? Sure. Would you plan to though? Unlikely.
Generally, retirement planning should consist of three main stages. The first is active retirement and that goes up to about age 70-75 (these things are somewhat nebulous), and in that stage people aren’t really reducing expenditures and many increase their expenses. They’re doing the things they always wanted to do and doing it while they can. In the next stage, which is semi-active, they’re spending less and doing less. This goes until roughly 85. Less travel and activities, but not nothing. Finally after around 85 years of age we have passive retirement. People stop traveling and aren’t able to do as much for activities.
Financial plans are ever changing and evolving though. Our circumstances change fairly quickly and I’m sure that for most of use if you look at your life and position in 2010 and today there are enormous changes. Some of those changes are planned and prepared for and some force you to adapt and adjust as they happen. A good financial plan does that with you; it’s not set in stone and says “you’ll live on this figure forever because that’s it”, and I’d imagine a lot of planning completed that way would fail.
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