I get this question all the time.
In my opinion, spending habits don’t just magically change. They were developed over your life time so start your retirement planning process early to accommodate them.
Here are the steps I take with people who don’t know projected spending in retirement:
Know what you are spending NOW:
BASIC LIVING EXPENSES
We will use these numbers in the planning software and let it calculate the inflation in your projected lifetime.
The software provides medical costs projections for Medicare premiums at age 65 on as well as private health insurance premiums if you retire prior to age 65.
Each one of these options can be explored within the planning software to get you in the confidence zone for retiring.
Retirement planning is not a one-and-done activity. The plan should be addressed each year to account for any curve balls life has a way of throwing at people.
A plan just helps guide you on how best to handle them.