That's a good point that tends to make some people overestimate what they will need in retirement.If you're saving 20% of your income for retirement, assuming you've planned appropriately, that's immediately 20% of your income that you won't need for retirement. And add the reduced taxes on top of a smaller income, perhaps less in commuting expenses, and maybe that a retired couple might be able to have one car instead of two, et cetera, et cetera, and if people live simply, there's a good chance they'll need less than they think they will. I think it depends on the individuals whether or not they really get to keep that 20% that was initially earmarked for savings. In our case, we will have to provide our own medical insurance, and that's a big expense that we don't pay for now.For my planning purposes, I do use 100% of my paycheck as that's what we live on now. I have done things like reallocate the mortgage to medical expenses, the kids' college savings to a travel fund to visit them wherever they may end up, and have done other things like decrease groceries but increase dining out.I have a spreadsheet that has estimates of what we spend now on things, and I use that to estimate what we'll spend in retirement so that I have some sort of planning guideline. That still says that we need 100% of my paycheck, so that's how we plan.We've always put DH's earnings into savings, so I just ignore those as we won't need that during retirement, but in reality, he expects to keep doing a little bit of that to have something to keep him busy.I just find the exercise of thinking all this through and writing it down to be useful in determining things like target savings goals and target retirement dates. We're still hoping that it will be somewhere between the day the kids graduate college in 6 years and 8 years out.
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