Middle Age Finance: How Much Money Are You Putting Away For Retirement? Retirees Finding Expenses Higher Than Expected

Expenses in later life are proving to be bigger and more unpredictable than many retirees anticipated, says the WSJ in their Money Matters column.

Key takeaways from the article:

[There is a standard rule of thumb that...] your spending needs in retirement will likely amount to 75% to 85% of your pre-retirement salary. [However] ...many retirees said their financial needs equal or exceed their spending during their working years.

Among the primary reasons is discretionary spending for far-flung travel and home renovations. "The reality is that when people retire, they want to do more than when they were working and had no time," says Larry Ginsburg, a certified financial planner in Oakland, Calif. But retirees also are encountering some surprising expenses, like higher-than-expected costs for homeowner's insurance and health care.

Figuring out how much you need is only one piece of the puzzle. Unsaid, of course, is how you will build up a nest egg to generate that level of income and determining if that is even feasible. If not, and if you figure out this out early enough, you'll be able to modify expectations and avoid making promises you can't keep.

If this isn't spurring you to start your own financial planning you are not alone. Many don't and those that do plan don't particularly enjoy it.

Aetna, the health insurance provider did a study that showed 31% of pre-retirees would rather clean their bathrooms or pay bills than plan for retirement. [Link]

But like going to the dentist or getting your annual physical, the fact that it isn't particularly isn't a good enough reason not to do it. And here's one bad side-effect of poor financial planning:

A new Employee Benefit Research Institute survey finds that almost half of today's workers have less than $25k in savings and investments.

To help you get started here are a few retirement planning resources available on the web:

Link to MSN Money Calculator in which you key in basic factors (age, income, goal retirement age, current savings, etc.) to help you calculate how much do you really need to save, how long do you need to work, etc. all based on your assumptions.

Link to an University of Illinois Extension Retirement Financial Planning Guide.

Link to CNNMoney article on the "10% rule", "4% rule," and other so-called rules of retirement planning.