Tags: income | retirement | lifestyle | give

WSJ: Forget Rule of Thumb for How Much Income You'll Need in Retirement

By    |   Tuesday, 24 Dec 2013 06:43 AM

The standard guideline that retirees will need 75 to 85 percent of their pre-retirement income each year isn't worth much, according to The Wall Street Journal.

"The only hard-and-fast rule for how much retirement income you will need is that there is no hard-and-fast rule," writes The Journal's Kelly Greene.

"New research shows that many retirees can live well on less than that, but others rack up higher expenses through travel, expensive hobbies or medical costs that can't be avoided."

Editor’s Note:
Retired Americans Slammed by Obama’s Redistribution Plans

To be sure, many retirees overestimate the real costs of retirement by as much as 20 percent, David Blanchett, head of retirement research at Morningstar in Chicago, tells The Journal.

In trying to figure out how much income you need, there are several factors you need to look at closely, including your savings habits, inflation, life expectancy, lifestyle, optional expenses, planning for shocks and where you live, Greene writes.

As for lifestyle, Todd Schneider, a Dallas-area investment adviser, asks his retiree clients whether they have a vacation house, how much they spend on wine, whether they own pets, whether they collect art, whether they gamble and whether they provide gifts to children or charities, Greene says.

"I don't find most people stop giving once they retire. Sometimes they're giving more," Schneider told her. "And people's hobbies are going to be more expensive as they have more time."

According to CNBC, one myth about retirement is to never touch your principal.

That only applies to the very wealthy, who don't need to do so, CNBC says. For the rest of us, "it really is okay to spend your capital. That's what it is there for," Tony Webb, senior research economist at the Center for Retirement Research at Boston College, tells CNBC.

Editor’s Note: Retired Americans Slammed by Obama’s Redistribution Plans

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The standard guideline that retirees will need 75 to 85 percent of their pre-retirement income each year isn't worth much, according to The Wall Street Journal.
income,retirement,lifestyle,give
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2013-43-24
Tuesday, 24 Dec 2013 06:43 AM
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