- You need to continue to save for your later years because you will likely have 20, 30 or more years left
- A third of folks in their 60’s continue to work or have encore careers and still pay into FICA
- Even if you stop or cut down on your work, you’ll still have travel expenses
- Fewer and fewer homeowners ever pay their mortgages off completely or rent, so they still have a house payment.
The feedback has been mostly positive and appreciative. Most people looked at my reasoning and said to the effect, “Hey, you know, he’s right. I will be working part time so I will be contributing to FICA and adding to my retirement plan. I may not have to commute as much or buy new clothes for work, but my travel expenses will certainly not decrease because I’ll be doing just as much running around. And I’ll have a lot more time to travel which will cost me even more. As for paying off my home, well, I’ve refinanced so I still have a mortgage payment and will have one for many years.”
My 82% may not be the right number for you: yours may be higher or lower depending on your individual situation. But I’m guessing that on average, it’s closer to the real number than a flat 70%.
Now that’s not to say that 70% is wrong. It’s just not appropriate for those of us in our early retirement or semi-retirement years. I suspect that when I’m much older, am not working at all, and beginning to tap into my assets for living expenses, I might fit the profile. I’ll not be adding to FICA and my retirement account the 10% or so I’m doing now. So that will account for most of the difference. And yeah, as I get older I may not travel so much. Who knows about my housing expense. I assume I’ll always have to pay something, either a mortgage or rent.
But for now, I’m sticking by my 82% estimate. And I’d love to hear from people what they think, how much they’re living on compared to before, and what surprised them about their later years.