Think of all of this remote work and not-going-anywhere-except-on-Zoom-calls business as a prequel to retirement: You’re home a lot, and (except for the actual work thing) behaving much like you would in retirement.
So, how’s the spending coming on your test drive?
Before you can determine how much you need to save for a fulfilling retirement (and you should), you first need to know how much you will spend in retirement.
Financial planners have traditionally estimated that retirees need 80% or more of preretirement income to maintain their standard of living, though individual situations vary greatly. Another data point: According to the latest Bureau of Labor Statistics’ annual survey on consumer spending, the average retired household spends 25% less than the average working household each year.
That said, retired households do spend more than working households on many items, including big-ticket expenses such as health care and travel. Here’s a look at 10 budget categories where retirees are likely to spend more.