Life Stage
The retirement budget: build it forward, not from a rule of thumb
Most retirement budgets start from a rule — "70% of pre-retirement income" — and end there. The version that works builds forward: real categories, real amounts, and dated lumpy years for travel, healthcare and the car. Then it tests the result against actual income sources.
- Category-first
Real lines: housing, food, healthcare, transport, travel, giving.
- Dated lumpy years
Travel, car and healthcare years are dated events, not averages.
- Income test
Pension plus withdrawals must cover the dated months.
- 10% buffer
The contingency line that makes the plan survive reality.
The category build
| Category | Typical share |
|---|---|
| Housing | 25–35% |
| Healthcare | 10–20% |
| Food | 10–15% |
| Transport | 5–10% |
| Travel + leisure | 5–15% |
| Buffer | 10% |
Building it
- List fixed costs: housing, utilities, insurance, taxes.
- Cost healthcare honestly — premiums plus a dated co-pay allowance.
- Add variable lines from your actual current spending.
- Add the lumpy years: travel, car replacement, home repair.
- Test monthly against pension and withdrawal income.
The two checks
Check one: does the monthly total fit the income? Check two: does the cash hold through the lumpy years? A budget that passes monthly but fails the car-replacement year is still a failing plan.
The calendar makes check two visible — project the full year and the dips appear before they happen.
Frequently asked questions
How much do I need to live on in retirement?
Build it from your real categories. Most retirees land at 70–85% of pre-retirement spending, but healthcare and travel years are where the estimates fail.
What do people forget in a retirement budget?
Healthcare inflation, car and home replacement cycles, travel years, and taxes on withdrawals — all dated events, not averages.
How is a retirement budget different from a working budget?
Fixed income replaces salary, healthcare costs rise, and lumpy events come faster. The structure — dated and tested — is identical.
When should I start building it?
Five years before retirement. The earlier the dated model exists, the more levers you still have.
A retirement number you can trust
Free dated planning for the years ahead.