If you are nearing retirement from Lockheed Martin, then you may be asking yourself; “How much money will I actually spend during my retirement?” Estimating exactly how many expenses you will incur each year during retirement is nearly impossible. Some planners use a general benchmark of spending 60%-80% of your current salary to estimate your retirement expenses. However, using a one-size-fits-all approach is not prudent, as retirement planning should be very personalized and based on your retirement lifestyle plans. In this post, we will address when this benchmark can be applied for some individuals and when it may not be appropriate for others.
Retirement lifestyles vary from person to person – extremely busy and on the go to laid back and enjoying being home and everywhere in between. Today we are going to focus on the benchmark way of planning with the two retirement lifestyle extremes – busy bee and homebody.
Homebody – This type of retirement lifestyle is where the 60%-80% benchmark strategy could possibly be an accurate representation of your retirement expenditures. The benchmark strategy may be perfect if you are simply happy with no longer being employed and living life lowkey at home. When living this lifestyle, oftentimes expenses are reduced with no more commutes, eating out, dry cleaning, etc. Many times, retirees also choose to downsize their house, giving them less to manage and maintain and again reducing their retirement expenses.
Busy Bee – This type of retirement lifestyle is where the 60%-80% benchmark strategy would not be an accurate representation of your retirement expenditures. A large number of individuals desire to spend their retirement years doing things that they were unable to do during their working years, such as spending time with grandchildren, traveling, volunteering, hobbies, etc. When living this lifestyle, oftentimes expenses can be the same or even more than they were prior to retirement.
The question is what type of retirement lifestyle do you want? To help you answer that, ask yourself these questions: While working, what did you do on weekends in your free time? Did you stay home, or did you go do something? Now, consider viewing retirement through this lens: every day is a weekend. What does that mean to you? Do you think you’ll keep doing the same things as you did on actual weekends while working? Being able to foresee your desired retirement lifestyle will be a great aid in your retirement planning. This is where financial planners like us, Lockheed Martin Retirement Specialists, come in handy. If you would like to make sure your retirement plan is on track, give us a call today at 817-210-3444 or click HERE to book your complimentary consultation.
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