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To estimate how much money you may need in retirement, use your current
spending plan and your records of past household expenses as a guide to
filling in the Estimating Montly Cost of
Living worksheet.
- Enter your current expenses for each category in the "Now" column.
Notice that annual and semi-annual expenses are broken down into monthly
amounts.
- Decide if you will spend less, the same, or more in each category
after retirement. This will be simple to do if you decide to remain
in the same home in which you lived before retirement. Many of the expenses
will remain the same.
- If you think the expense will increase or decrease, put this amount
in the "After Retirement" column based on the approximate dollar amount
in today's dollars.
When projecting future expenses, it is easy to forget about things that
will wear out and need replacing. Many of these expenses can be planned
into your pre-retirement budget, but they should be considered when looking
ahead. Use the Large Future Irregular Expenses
worksheet to help you plan ahead.
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