We developed a 2020 budget similar to the one today's retirees live on from data in the U.S. Department of Labor's Consumer Expenditure Survey. Using the 1998 survey, the most recent published, we subtracted mortgage payments, because most retirees have paid off their homes. We made inflation adjustments by increasing health care expenditures by the medical inflation rate of the past 22 years, by applying the 22-year food inflation rate to food expenditures, and so on. One beer, not two. While sufficient, many couples might consider that budget tight.
Indulgences are also rare.
It would be even tighter for a single person. When people finally quit working, they immediately want to travel or do other things they've been putting off for years. So while boomers may think they are returning to work only to raise funds for that new toy or trip, the real reason just could be for sheer entertainment. See the charts below. To get a more personalized idea of what your monthly budget will look like in retirement, click here to try this simple work sheet .