Start with expenses—not a salary percentage.
Working income does not show how much a retirement lifestyle will cost. Housing, debt, travel, family support and saving itself can all change when work ends. Two people with the same salary may therefore need very different retirement spending.
Begin with recent spending, then change the categories that are likely to look different. Use monthly amounts for recurring costs and keep large one-time items separate.
Four spending groups make the estimate easier to review
Essential and recurring
Housing, food, utilities, transportation, health costs and insurance that have little room to pause.
Flexible lifestyle
Travel, hobbies, gifts, dining and other goals that may be adjusted without disappearing forever.
Temporary or transitional
A mortgage, a move, an early-retirement travel period, a vehicle or support that lasts for a known period.
One-time and later-life
Repairs, a replacement vehicle, a move or possible support needs that do not belong in every monthly total.
Spending can change more than once.
Work-related costs may fall when retirement begins, while travel or hobbies may rise. Later, housing, transportation or support needs may change again. That does not mean spending always falls or follows one predictable curve.
Inflation can also affect categories differently. Keep the first estimate on one dollar basis, then revisit the categories as actual experience becomes available. Learn how today's dollars keep the comparison consistent.
A simplified example
One retirement can have several spending periods.
A fictional household expects a mortgage to continue for three years after retirement, more travel during the first five years and a vehicle replacement later. The recurring budget holds everyday costs; the mortgage and travel periods are shown separately, and the vehicle remains a one-time item.
This structure does not predict what the household will spend. It prevents a temporary cost from being treated as permanent and keeps a large future purchase from disappearing inside an average.
Illustrative only. The names and circumstances are fictional.A checkpoint
Which costs continue, change for a while or happen once?
Review recent bills and statements. Mark recurring essentials, flexible goals, known temporary periods and one-time items before choosing a monthly retirement estimate.
Explore it in your plan
Estimate monthly retirement expenses.
Enter a first monthly amount in today's dollars. Keep temporary and one-time costs in your notes so they can be tested in the more detailed plan when they matter.
Official sources
These sources were reviewed August 17, 2026. Program rules and tax treatment can change; confirm the information that applies when acting.
- FCAC: Planning and saving for retirement (opens in a new tab)
- FCAC: Making a budget (opens in a new tab)
- FCAC: Your retirement financial checklist (opens in a new tab)
Retired Kevin is not affiliated with or endorsed by these organizations.