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Retirement: Spending vs. Income Planning

One common rule of thumb for retirement savings is to replace 80 percent of your pre-retirement income — or an even higher percentage. But what if you currently spend more than you earn? Or what if you spend much less than you earn? Perhaps a better measure would be to base your retirement income on your current spending habits. After all, income isn’t always a measure of a person’s lifestyle; spending habits often provide more clarity on the lifestyle we live.

In retirement, you will likely spend less money on things like housing, clothes, commuting and children. On the other hand, you may spend more money on health care and household assistance. Therefore, it may make sense to plan on having enough income to cover the same level of spending as your pre-retirement years.

According to a survey by the Employee Benefit Research Institute, about 38 percent of retirees report they actually spend more in retirement than they did while they were working. Twenty-one percent say they spend less, while 38 percent say they spend the same amount.

If you go by the results of this survey, more than half of pre-retirees need to plan for at least as much income as they spend now — which may be a challenge for those who already spend more than they earn. Regardless of how much you earn now, you may want to consider basing your retirement income plan on how much you currently spend, rather than how much you currently earn.


The content provided here is designed to provide general information on the subjects covered. It is not, however, intended to provide specific legal or tax advice.  Contact us at info@securedretirements.com or call us at (952) 460­-3260 to schedule a time to discuss your financial situation and the potential role of investments in your financial strategy.

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Danielle Christensen


Danielle is dedicated to serving clients to achieve their retirement goals. As a Paraplanner, Danielle helps the advisors with the administrative side of preparing and documenting meetings. She is a graduate of the College of St. Benedict, with a degree in Business Administration and began working with Secured Retirement in May of 2023.

Danielle is a lifelong Minnesotan and currently resides in Farmington with her boyfriend and their senior rescue pittie/American Bulldog mix, Tukka.  In her free time, Danielle enjoys attending concerts and traveling. She is also an avid fan of the Minnesota Wild and loves to be at as many games as possible during the season!