Two recent retirement studies provide some useful data to contemplate when thinking about your retirement.
How do spending patterns change over the course of retirement? One of the biggest fears for a retiree is running out of money. And that fear impacts spending. New research from Milliman graphs the income/expense patterns of low, middle and high-income earners.
While spending falls through retirement, spending on health as expected, increases dramatically from age 65 to 85, more than doubling. You can see a summary over at Adviser Voice.
An insight into global retirement comfortability can be found in the 2018 investor study from Schroders “Saving for a Comfortable Retirement“. The study found retirees significantly underestimate how much of their retirement income will be needed for basic living expenses.
There is a real danger that people globally are underestimating the proportion of their retirement income that will need to be allocated to basic living expenses and the amount of money they will need to live comfortably in retirement, particularly in the current environment of low returns and increasing inflation. Lesley-Ann Morgan, Global Head of Retirement, Schroders