It’s a fact: people are living longer! With people living into their 80s, 90s and 100s, they’re spending a lot more time in retirement!
So, how many years should you plan for? Well, that all depends on your life expectancy.
Life expectancies are stated as statistical averages, so you could have more or less years than what’s shown on a chart somewhere, in fact, about half of all people outlive their life expectancy. The key is reviewing your lifestyle along with those statistics and being prepared for the changes that will come later in life.
Changing income needs
If you're like most people, you're going to need somewhere between 65 and 85 percent of your current income to maintain your present lifestyle in retirement.
While work-related expenses, Social Security and other taxes may decrease in retirement, other expenses will likely stay the same or increase.
How you spend your money will likely change over time too. For example, early in your retirement you may spend more money on traveling and hobbies. During mid-retirement, when the novelty of travel and hobbies has worn off, your expenses may go down as you stay closer to home. In your later years, you may once again see expenses go up as you pay more and more out-of-pocket for health care expenses.
Use this life expectancy table to help you get a rough idea of how many years your retirement income will need to last.
|Age at Retirement||Male Years in Retirement||Female Years in Retirement|