Retirement Income
How Much Retirement Income Will I Need?
The old rule of thumb says you'll need 70 to 80 percent of your working income in retirement. Sometimes that's about right. More often, it hides the details that actually decide whether the money lasts.
Why the rule of thumb misses
Some costs fall in retirement — commuting, retirement contributions, payroll taxes. Others rise, and not gradually: healthcare before Medicare, travel in the early years, and later, care-related costs. Spending in retirement isn't a flat line, it has chapters. A single percentage can't capture that.
A better starting point: your actual month
Instead of a formula, we start with a plain list. What does a normal month cost you right now — housing, utilities, insurance, food, cars, medical? What's already paid off, and what won't be? Then the flexible layer: travel, grandkids, gifts, the things you retired to do.
Separating essential spending from flexible spending matters more than the total. Essential expenses are the ones your income plan has to cover no matter what the markets are doing that year.
Then subtract what's already coming in
Social Security, a pension if you have one, rental income — whatever arrives on its own each month. What's left after subtracting that from your monthly number is the gap. The gap is what your savings have to produce, every year, for a retirement that may run 25 or 30 years.
Two adjustments to keep in mind: prices will keep rising, so today's numbers grow; and taxes don't stop in retirement — withdrawals from retirement accounts are usually taxable.
Revisit, don't set and forget
Your first-year estimate will be wrong — almost everyone's is. The point isn't precision on day one; it's having a real number to plan against and a habit of checking it as life changes. That's exactly what a Retirement Review is for: we sit down with your numbers, find the gap, and talk through how to cover it from what you've built.
A note before you go
This article is general education, not advice about your specific situation — your numbers, health, and family will change the answer. Talk with our team before making decisions.
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