Retirement Riddles

Richard Quinn  |  Aug 1, 2022

I SPEND SIGNIFICANT time reading the viewpoints of people who are planning for retirement or already retired. My frequent reaction: What are they thinking?

When I review retirement planning discussions on Facebook and elsewhere, I often find the participants show little understanding of how to proceed or even what some basic terms mean. Here’s a sampling of the confusion and uncertainty I come across:

  • Should people aim to replace 70%, 80% or some other percentage of their preretirement income? And is that gross income or preretirement spending?
  • Is it okay to retire with just enough money to pay the bills and get by?
  • What is discretionary spending?
  • Do you need to keep a detailed retirement budget?
  • Does spending decline in retirement?
  • Is inflation a big deal for retirees?
  • Will seniors really spend $300,000 on health care in retirement?
  • How big a risk is longevity?
  • When should folks claim Social Security—at age 62, 70 or somewhere in between?
  • Are the days of saving money over once you retire?
  • Does the 4% rule still work? And how do you compute it?

Maybe the confusion isn’t surprising. You can find financial experts who will answer these questions in entirely different ways. My bigger worry: I see too many people who either overestimate or underestimate their retirement needs, or whose view of the future is either too pessimistic or too optimistic. How’s that for a definitive statement?

I try to be realistic about retirement—from my admittedly conservative financial point of view. My answers are opinions, though opinions based on decades of managing retiree benefits, conducting retirement planning programs and my own 12 years as a retiree. Still, they’re opinions nonetheless. With that caveat in mind, here are my answers to retirement’s thorniest questions:

Replace what? My advice: Aim for 100% replacement of your gross preretirement income. If you include Social Security, many people can already count on receiving 40% of their preretirement income. If you’re lucky, your employer may help fund part of the remaining 60%.

Frugal isn’t fun. Just getting by in retirement may be the reality for many people, but that shouldn’t be your goal. Do you really want to cut back your lifestyle? Do you want to live so close to the bone that an unexpected expense can wreak financial havoc? Aim higher.

Extras. Discretionary spending is what makes retirement enjoyable, so plan for it. Whatever you dream of doing is discretionary, whether it’s travel, hobbies, dining out or collecting stuff. Helping your children is discretionary, too.

Forget budgeting. You probably already know what you spend on necessities, how much you save and your net income. What’s a budget going to tell you that you don’t already know? Just make sure you set aside enough money to pay off your credit cards in full every month—no exceptions.

Steady spending. Surveys say that spending declines later in retirement. I’ve been retired for 12 years now, and our spending hasn’t fallen. Stuff—expensive stuff—keeps happening, hence my advice to aim for 100% income replacement.

Inflation’s impact. Inflation is a big deal, but its effects vary by person. Are you renting? Do you drive a great deal? Are you looking to buy a house? Don’t forget that, despite the rhetoric, retired people don’t live on a fixed income. If nothing else, Social Security benefits increase with inflation. The 4% withdrawal strategy also assumes annual inflation increases.

Big bucks. Spending on health care varies widely from one retiree to the next, plus that $300,000 figure mostly represents years of Medicare and Medigap premiums. Forecast your property taxes or rental payments for the next 30 years, and you’ll get a big number for those, too.

Longevity. The longer you live, the longer you can expect to live. For a 65-year-old man today, life expectancy is age 84, while at age 75 it’s 87. Longevity means more inflation and more time for unexpected stuff to happen. It’s another good argument for starting retirement with excess income.

Social Security. Forget about the breakeven point. What do you care? You won’t be around to see if you won the Social Security maximization game. Take your benefits when you need the money the most. Remember, there are tax implications and survivor benefits to consider.

Save till you drop. I still save in retirement. Yes, it’s far less than before, but it’s enough to replenish the emergency fund and put something in our grandchildren’s 529 plans.

Four percent rule. It isn’t a rule, it’s a guideline. Search the literature, and you’ll find some say 4% is out of date and that it should now be 3.5% or less. Search further and some experts say retirees are shortchanging themselves and should take more. Nobody knows with 100% certainty, so I would err on the conservative side. If you’re wrong, you can always take out more money later in retirement.

Originally published at


  1. I just celebrated my 66th birthday. I will work until I literally cannot do so physically. I care for my health, and I enjoy working. I will collect my Social Security at age 70, as fortunately I earn enough that the ‘3 for 1’ rule eliminates any gain from taking SS early.

    I greatly enjoy your columns.

    Sent from my iPhone



    1. As long as you enjoy your work, why not work, but keep in mind the SS offset for earned income stops at your Normal retirement age.


  2. I love reading those stories of people seeking advice. Just the fact that they seek advice is the first step to a happy retirement. However, it also amazes me the number of people who owe tens of thousands of dollars in debt plus a mortgage who expect to retire at 62 with an income less than what they own on their credit cards.

    I think the one truth is if you can retire debt free, you’ll have a lot more flexibility for what life will throw at you. It is not requirement to be debt free, but it is very helpful.


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