Two couples enter retirement with the same savings. One plans to winter in Florida, travel abroad, and help grandchildren with college expenses. The other looks forward to more time at home gardening, volunteering, and entertaining. The cost of these two retirement lifestyles could differ considerably. That’s why determining how much money will sustain a retirement begins with a more personal question: What do those years look like to you?
According to Northwestern Mutual, 46% of Americans don’t expect to be financially prepared for retirement. Yet no single savings target can capture the range of lifestyles people hope to enjoy. What matters is whether savings and other income can support the activities and experiences that make retirement personally fulfilling. Translating those aspirations into realistic expenses is an important step toward creating a retirement lifestyle plan.
When Will Retirement Begin?
Whether someone retires early, gradually transitions out of the workforce, or works into later years, the timing of retirement affects how long their savings will need to last. For example, retiring at 60 rather than 67 affords seven additional years to enjoy life outside the traditional workplace. However, it means financing those years without a regular paycheck. Social Security and healthcare also factor into the decision. Delaying Social Security benefits until age 70 increases monthly payments, while individuals retiring before Medicare eligibility at 65 must arrange alternative health insurance coverage.
A person can choose when to retire, but cannot predict how many years their retirement will last. Someone retiring at 62 who lives to 95 will need to finance 33 years of retirement. A sound income strategy should account for that possibility while allowing the flexibility to enjoy the earlier, potentially more active years.
Where Will Retirement Take Place?
Retirement presents an opportunity to reconsider where to live and how much of the retirement budget to devote to housing. Each option comes with financial and lifestyle benefits and trade-offs.
Staying in a longtime home can be appealing, particularly if the mortgage is paid off. However, maintaining a property with substantial unused space may tie up money that could support other retirement priorities. Property taxes, insurance, maintenance, and potential accessibility improvements also remain.
Downsizing may reduce expenses or free up home equity, although a smaller property in a desirable location won’t necessarily cost less. Relocating to a lower-cost-of-living area could stretch retirement savings further by reducing housing, tax, and everyday expenses. On the other hand, a condo in a walkable downtown may justify higher costs if it brings family, recreation, and everyday conveniences closer.
Snowbirding presents another possibility for those who want to escape colder winters without leaving their current community behind. Seasonal rentals offer flexibility, while purchasing a second home provides a familiar retreat. Comparing costs, including travel, upkeep, taxes, and insurance, can help determine whether the convenience and enjoyment justify the expense.
How Will You Spend Your Time?
Retirement may bring a welcome change of pace, but that doesn’t necessarily mean slowing down. With greater freedom over their schedules, individuals can devote more time to travel, recreation, hobbies, volunteering, and family.
The price of leisure varies just as widely as the activities themselves. Golf, boating, and international travel may command substantial annual budgets. New hobbies or continuing education can involve classes, equipment, or membership fees. Hosting friends and family can add to retirement expenses, particularly during holidays and special celebrations.
Work may also have a place in how individuals choose to spend their retirement years. According to the Employee Benefit Research Institute 2026 Retirement Confidence Survey, nearly half of workers expect to transition gradually into retirement rather than leave the workforce all at once. Part-time employment, consulting, or a second career can keep retirees professionally engaged, maintain social connections, and generate income to support their other interests.
Imagining a typical week or season, including how much time to devote to work and leisure, can help individuals estimate their spending and potential earnings. Budgeting for new interests and special occasions can make spontaneous adventures and other unexpected pleasures of retirement possible.
How Might Spending Change Over Time?
A retirement budget that makes sense at 65 may look quite different at 85. Financial planners sometimes refer to the “retirement spending smile,” a pattern of higher spending during the early, active years, followed by a decline in middle retirement and a potential increase later as healthcare needs grow. Travel, recreation, and other discretionary expenses may taper off with age, although rising medical costs don’t necessarily mean total household spending will increase.
Healthcare expenses may rise in later retirement as medical needs increase, making it important to account for these costs when planning how much to spend in earlier years. Fidelity estimates that a 65-year-old retiring in 2026 may need approximately $185,500 in after-tax savings for healthcare throughout retirement, excluding long-term care. Accounting for these expenses alongside changing lifestyle costs can help individuals make informed decisions about how much to spend at different stages.
Retirement savings should support enjoyment as well as financial security. Recognizing that certain experiences may be easier to pursue in the earlier, more active years can help individuals make the most of that time while maintaining resources for the years ahead.
Make the Most of the Years Ahead
Making the most of retirement depends on knowing which expenses your savings and income can comfortably support, where flexibility exists, and how today’s spending may affect security later. At SHP Financial, our Retirement Road Map brings together income, investment, tax, healthcare, and legacy planning to help clients make informed decisions about using their wealth throughout retirement. Contact SHP Financial today to schedule a complimentary review and explore how a personalized strategy can support the lifestyle you want to enjoy.
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