A good spending plan includes normal months, costly years, and cuts you could make after a setback. One flat number cannot show all three.
Replace the salary percentage with your life
A percent of your old pay can be a starting point. It does not know your mortgage, travel, family, taxes, or health plan. Start with what you spend now and what will change.
Look at at least one year of bills. This helps you catch taxes, insurance, gifts, memberships, and repairs that do not happen each month.
Create three spending layers
Put spending in three groups: needs that are hard to cut, wants you can pause, and large bills that do not happen every month.
- Essential: housing, food, utilities, transportation, insurance, baseline health care, and taxes.
- Flexible: travel, restaurants, hobbies, entertainment, and gifts.
- Irregular: vehicles, home repairs, dental care, family events, and major replacements.
Use phases instead of one lifelong number
You may travel more early, slow down later, and need more help near the end of life. Use a different spending amount for each stage.
Do not assume later years will be cheap. Travel may fall while care and help at home rise.
Keep taxes in the picture
The amount you spend is not always the amount you must take from savings. Taxes may mean you need to withdraw more.
The calculator gives a first view before taxes. Check taxes year by year before you make a final choice.
Write the bad-year version
Choose now which wants you would pause after a market drop. Write down which needs must keep being paid.
The goal is not to remove all fun. It is to know which cuts could be short and which problems would last.
Primary sources
Rules and limits change. Use these official sources to verify details for the year in which you act.
See what your current numbers imply.
Start with a transparent estimate, then use this guide to decide which assumption deserves a deeper look.
Use the retirement calculator →