Financial Planning for Retirement Workbook
Financial Planning for Retirement Workbook • CFS-685-W
Purdue extension
You also may spend more on travel, entertainment,
and leisure activities, because you have more time to
enjoy them.
Use Worksheet 1, “Your Retirement Lifestyle”
(page 5), to describe the lifestyle you desire during
retirement. As you dream about your retirement
days, will you be able to afford the lifestyle you find
desirable?
Your Current Financial Situation
As you plan for your retirement years, it is helpful
to look at what you are spending now to live. Use
Worksheet 2, “Estimated Annual Cost of Living”
(page 6), to record what you spend annually in each
category. If you only have monthly expense figures,
turn to the “Monthly Costs of Living,” Worksheet
9 (page 24). Record your monthly expenses and
multiply by 12 to get the annual figures to put on
Worksheet 2.
Note: The sample “Estimated Annual Cost of
Living” worksheet on this page is meant to serve as
a guide as you fill in your Worksheet 2. It is based on
this scenario:
a) Mr. and Mrs. Jones would like to retire at age 62,
11 years from now.
b) They guess that the inflation rate will rise slowly
and will average about 5 percent a year.
c) 11 years at 5 percent = 1.71 inflation factor (from
table on page 7).
d) Their estimated current annual expenses of
$32,277, multplied by the inflation factor of 1.71,
shows they will need $55,194 in their first year of
retirement to maintain their current lifestyle.
Example: Estimated Annual Cost of Living
Totals You
Spend Now
Inflation
Factor
Future Budget at
Time of Retirement in
11 years
Housing
$9,956 1.71 $17,025
Household operation and maintenance
$2,230 1.71 $3,813
Automobile and transportation $6,016 1.71 $10,287
Food $4,518 1.71 $7,726
Clothing $1,782 1.71 $3,047
Personal $1,521 1.71 $2,601
Medical and health $1,665 1.71 $2,847
Recreation, education $1,659 1.71 $2,837
Contributions $738 1.71 $1,262
Taxes and insurance $1,112 1.71 $1,902
Savings, investments $780 1.71 $1,333
Irregular expenses
(ex. gifts, license plates, holiday spending,
etc.)
$300
1.71
$513
ANNUAL TOTAL $32,277 1.71 $55,194
Adapted from Planning a Retirement Budget, a CEH Topic, Hogarth, Cornell University, 1984.
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