Retire With Money; Income Stops, Outgo Rises Money (10/01) Vol. 15, No. 10 p.175; Fisher, Dan
Retirement savings should not only cover about 80 percent to 90 percent of an individual's pre-retirement spending, it should exceed it in an expectation for increased spending, especially if early retirement is an option. Medical insurance for early retirees rises because Medicare is not available to those under 65; travel expenses increase if you plan on vacationing often during early retirement; and periodic maintenance costs for home owners tend to increase. Additionally, what were once miscellaneous costs may now become regular expenses in a retirees budget, such as golf, eating out, and other recreational activities. Retirement savings should allow retirees to live comfortably with enough of a safety net to mitigate emergency situations.