A popular rule of thumb suggests that retirees need 80% of their preretirement income to make ends meet, and some experts encourage saving even more to avoid running out of money. In the face of such daunting goals, 53% of preretirees say they plan on working past age 65 to ensure that they have enough money, according to the Transamerica Center for Retirement Studies.
But the 80% rule isn’t for everybody, and it may lead to inflated savings goals that cause undue anxiety as you plan for retirement. Consumer spending decreases significantly as you age. Data from the Bureau of Labor Statistics shows that the average retired household spends 25% less than the average working household.
In order to know how much you need to save for retirement, it’s important to know what your spending will look like once you actually retire. Consider these 10 budget line items on which you’ll likely spend less in retirement.