save and save and save for retirement, trying to tune
out those escalating estimates of what you need to never
run out of money. Conventional wisdom blathers that in
retirement you spend only 75 percent of your current
expenses, anyway. Think again. Here’s why.
often spend too much early in retirement and — the
retiree’s nightmare — outlive their cash.
from having more time to pursue increasingly expensive
recreation from golf to cruises, other factors pinch
retires like no post-work generation before. These
include, as Jill Krasney notes in her Business Insider
article "The Notion That You’ll Spend Less in
Retirement Is Totally Misguided," skyrocketing
health care costs and bankrolling equally skyrocketing
costs of housing, education and other life expenses for
both kids and grandkids.
retire then? Why not keep working? As the Employee
Benefit Research Institute notes in its "2013
Retirement Confidence Survey," almost half (47
percent) of respondents retired earlier than planned
because of illness; a third of those respondents also
retired early simply "because they can afford to do
so." Maybe a big financial mistake.
than 1 in 5 workers and retirees say they expect to
retire later due to the poor economy, lack of faith in
Social Security or the government and inability to
than a third (36 percent) report they expect to wait
until after age 65 to retire and 7 percent don’t plan
to retire at all.
seven of 10 workers plan to work for pay after they
retire. Only a quarter of retirees report working for
pay since they retired.
half of retirees are "not at all confident"
about finding paid employment in retirement.
notions and pessimistic outlooks lead to faulty
retirement planning at any age, working or retired.
you save too little when working because you expect to
spend less once you retire — justifying in your mind
why you can spend more and not save more now. Once
retired, you again expect to spend less when older and
once again continue to spend more. Expect to cut
spending later to justify spending more now?
you run out of money, period.
illness or the economy ended the job and with it your
income. Maybe you spent what little you saved. In any
case, yes: Your expectation about future spending came
an annual checkup on your portfolio during retirement
and try these spending-control steps:
that you spend too much and think about why you spend so
much. Does it make you feel good? Is it the pleasure of
having money to spend on what you like?
a goal of how much you want to save. Whenever you get
your money, put it all — or at least a portion of it
stuff on what you actually need. Keep a record of what
about all the money you spent instead of saved. If you
hit a milestone in your saving goal, don’t celebrate
by blowing all of it at once.
to spend with cash as much as possible. Parting with
actual cash makes spending feel more real.
remember: You can manage spending at any age.