Retirement spending: You may need less than you think

Many need 10% to 30% less than planners suggest.

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From the June 2014 issue of the magazine.

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David Blanchett, head of retirement research at Morningstar Investment Management, ran the numbers on the actual spending patterns of retired couples over 30 years. He tracked three annual spending levels: US $25,000, $50,000 and $100,000. He found that as couples aged, they withdrew less than anticipated, mainly because they had simpler lifestyles. As a result, many retirees may need 10% to 30% less in savings than planners suggest.

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Source: Morningstar Investment Management

4 comments on “Retirement spending: You may need less than you think

  1. I agree 100%. Most financial planners are interested in one thing…..that being getting 1-2% of your portfolio for the rest of your life. The ones I’ve had before taking over my own portfolio based everything on what I was earning now. It wasn’t until I stressed that I don’t plan to have a mortgage or any type of loan payment that they then agreed I wouldn’t need as much. I also plan to do the majority of my traveling, while in good health, before I retire. I hope to spend my retirement years close to home spending time with family.


  2. I also agree 100%. As a dedicated financial planner for the last 22 years before my retirement, I noticed from actual experience with my clients that as they aged, they spent less. In the early years there was much travel and longtime vacations from home. As they got older they started to stay at home more. As grandparents, they wanted to be around for the school concerts, special family events, Christmas, birthdays. Travel became less and
    less. Travel also became less due to health concerns. A graph of their investment assets would show a reduction in the early years, then a leveling out as they stayed home, and then growth in assets as they aged further. I encouraged my clients not to be afraid to spend, within reason, in the early retirement years to enjoy the fruits of their labors. Regardless of income levels, those who retired without debt had many more lifestyle advantages in retirement. No debt is the key to a successful retirement.


    • Two things…No matter how humble OWN your house/Condo./car..The rest is groceries etc.


    • You are right on with the comment…No debt is the key to a successful retirement…


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