Assumptions About Expenses
Have you ever reflected on the fact that frequently, the final years of your full-time career often coincide with your peak income? However, as your earnings increase, so can your expenses. And if you’re not saving at the same rate, it could be difficult to sustain your lifestyle in retirement.
The reason for this is that many individuals who are not yet retired assume they will need less income in retirement, because the ‘expense’ of saving will no longer be there. They neglect to realize that not only will some expenses increase in retirement, for example, healthcare, but so will other expenses related to the lifestyle they want to live in retirement. For example, travel.
We suggest our clients estimate their retirement expenses to be as much as they are pre-retirement. Call us, we’re here to help, and would look forward to discussing this further with you.