I read a lot of articles about retirement. A lot. Occupational hazard. But MSN Money had one that made me think. 6 Smart Ways to Save for Retirement was the title. The first one was:
Don’t inflate your standard of living.
As you get raises and promotions throughout your career, it’s common to want a bigger house and nicer stuff. But part of each pay increase should go toward your retirement savings.
Instead of buying something with a bonus or trading up to a nicer car when you get a raise, some of that extra money needs to be tucked away for retirement.
Now, the bit about allocating part of our raises to retirement is something I already preach, thank you very much. But this made me think: you know why else we shouldn’t inflate our standards of living? Because it will be a lot easier to live within our means after retirement if we don’t.
What I am hearing lately is that the experts don’t even know how to answer the question, “How much will I need?” because our needs are all so different. The standard used to be 80%. We will need an income of 80% of our current salaries to live on after retirement. That number doesn’t work. Some of us will spend a lot less on clothes and commuting, etc. But some of us will want to spend a bunch on travel and other things we haven’t had time to do. So if we can manage to consume less now, we will have less trouble adjusting to consuming less later.
I suck at this. I love the Internet and I love to shop. Better get a handle on it.