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Your Spending Needs in Retirement

Your Spending Needs in Retirement

Are you calculating how much money you will need in retirement using the same value each year?

If you are, you might not be planning correctly.

As it turns out, you will probably spend more in the first few years of your retirement as you catch up on on things like travel, hobbies, etc. but after those years you may find that your spending will likely begin to decrease.

According to an article published in the Financial Post, the amount you spend in retirement declines over time. They stated that according to according to an analysis of U.S. Department of Labor figures completed by J.P. Morgan Asset Management, they found that households headed by people over the age of 75 spend just 72% of what households headed by people between the ages of 65 and 74 do, and that these people spend about 63% of what households headed by people 55-64 do.

So, if you’re planning for retirement on a fixed amount each year right through your retirement, you might want to adjust that to what you think your lifestyle needs will actually be.

Who knows – maybe you will actually have more money available then you think!

Here is a video from the Globe and Mail on this same topic that also emphasizes this point;

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