Guide
Retirement budget categories.
A retirement number is only as useful as the spending estimate behind it. Break the budget into categories before entering annual spending in the calculator.
Start with essential expenses: housing, utilities, groceries, insurance, transportation, basic clothing, and recurring medical costs. These are the bills your plan should be able to cover even in a weak market.
Next, separate flexible lifestyle spending. Travel, dining out, hobbies, gifts, subscriptions, and upgrades can often be reduced during bad return years. Treating them separately helps you see how much room you have to adapt.
Healthcare deserves its own line. Include premiums, deductibles, prescriptions, dental work, vision care, and out-of-pocket costs. If you plan to retire before Medicare eligibility, build a bridge-healthcare estimate instead of assuming today’s employer plan will continue.
Do not forget taxes. Traditional retirement account withdrawals, taxable brokerage gains, pensions, and part of Social Security may affect taxable income. The calculator asks for spending, but your portfolio may need to support both spending and taxes.
Use annual totals
Convert each monthly category into an annual number. Add irregular costs like property taxes, car repairs, home maintenance, insurance renewals, and planned family support.
Build two versions
Create a baseline budget and a lean budget. The gap between them shows how much flexibility you have if markets disappoint early in retirement.
How to use this in the calculator
Use the baseline annual number for the calculator’s retirement spending input. Then rerun the same scenario with your lean budget. If the success rate changes dramatically, spending flexibility is a major part of your plan.
Run the calculator