Retirement Income

Last Updated Jul 20, 2009 4:41 PM EDT

How much income will I need in retirement?

During an average retirement you'll need 70-80 percent of your pre-retirement income to maintain the standard of living you enjoy while working, according to most estimates. You don't need to reproduce your full paycheck, according to this thinking, because you'll no longer have work-related expenses like commuting costs and Social Security taxes.

But who plans on having an average retirement? To protect against unpleasant surprises, you should sit down and estimate your expenses yourself. Take your current spending and adjust it based on the ways your expenses are likely to change after you retire. You'll have lower commuting costs, but your medical costs are likely to rise. You may not have a mortgage, but you may spend more on travel and recreation.

The following links offer tools for building a retirement budget and estimating retirement health care costs, as well as tips for uncovering your own retirement income rules of thumb.

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