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Estimating Expenses for Retirement
If you are in the least worried about having enough for retirement, figure out what you NEED first!
The term "expenses for retirement" implies a very different thing to each person.
If you presently live on $500/week and need the same income in retirement, you have to figure out where $2000/month will come from ($500 per week x 4 weeks per month). Relatively simple.
However, maybe your present income is more than you need as you aren't spending your net income... you put $100/week into a savings account. Good for you! That means you only NEED $400 per week x 4 weeks or $1600./month, right?
A gal earning $30,000 a year may need the same spendable net income, or may not. She might be married and can lessen her income in retirement as he is still working. She might simply save less, or spend less.
How much DO you SPEND every month? Use this WORKSHEET to figure out your expenses for a normal month with no additional things -- like birthday parties, day trips, etc. You want the absolute bottom line here... the least monthly income you can live on, comfortably.
You could go a step further to figure out what you SAVE when you retire. Some won't save any money in retirement -- they have no long drive to work so they won't save on gasoline and the wear and tear of their car. They don't eat out for lunch so they won't save money on all those restaurant bills.
One example, Rich spent approximately $100 per week on gas as he had a large truck and a long drive to work each day. He also (as a bachelor) went out to lunch daily, and since lunches are no longer cheap, spent a minimum of $5 on lunch (usually more), plus coffee twice a day.... ok, so his working expenses look like this:
$100 per week gasoline
$ 25 per week lunch ($5 per meal x 5 days)
$ 10 per week for coffee ($1 per coffee, twice a day x 5 days)
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$135 per week X 4 weeks =
$ 540 PER MONTH SAVED...
Simply by Retiring and Spending Those Dollars Elsewhere!
Finally, Rich's working expenses were actually even more... but my example looked SO high, I opted for lesser numbers here...
either way, it depends on monies YOU spend each week to work!
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