If you’re getting close to retirement and working with a financial advisor, chances are you’ve been pretty organized. Most of the prospective clients I meet for the first time come in with:
- Neatly organized account statements
- Social Security benefit estimates
- Copies of their estate documents
- A good idea of their property values and income
But there’s one question that almost always stumps them:
“How much are you spending each month?”
It’s the most important—and most underestimated—part of retirement planning.
Why Estimating Monthly Spending Is So Hard (and Why It Matters for Retirement Planning)
Most people pause when I ask about spending. Then they start itemizing bills out loud:
“My mortgage is about $2,000. Utilities are around $400. Cell phones are $150…”
But what’s missing are the small daily expenses and the fun stuff:
☕ Starbucks runs
🍝 Dinner with friends
✂️ Haircuts and salon visits
🎁 Gifts for grandkids
📦 Online shopping splurges
Eventually, they’ll toss out a number like, “We probably spend about $6,000 a month,” and then look at their spouse to confirm. But here’s the thing…
If you’re making $200,000 a year and claim to spend only $72,000, but you’re not saving $125,000 a year—then the math doesn’t add up. That money is going somewhere.
The Hidden Costs of “Weird” Months
When I point this out, many people say:
“Well, last month was a weird month…”
But every month is a weird month.
There’s always something: car repairs, vacations, unexpected medical bills, family events. That’s life. And in retirement, those same patterns often continue—or even increase, especially in the early years when you’re active and checking off your bucket list.
This is why your retirement income plan needs to reflect real spending habits, not just idealized budgets.
Spending Is a Habit—Not a Spreadsheet Number
Many people assume their spending will naturally decrease in retirement. But unless you intentionally change your habits, your lifestyle usually stays the same (at least for a while).
The truth is:
✅ Spending is a habit
✅ Retirement planning should be realistic
✅ Financial freedom comes from clarity, not constraint
A Simple Way to Track Your Real Monthly Spending
Here’s the assignment I give nearly every client:
📌 At the end of each month, look at every account you spend money from—checking, credit cards, Venmo—and tally how much went out.
No categories, no judgment. Just the raw total.
Do this for at least three months (12 months is better) and calculate the average. That’s your real spending baseline—and it’s the number we should use when building your retirement income strategy.
Why You Shouldn’t Feel Guilty About Spending
Here in the Midwest, we often associate financial pride with saving, not spending. Many people feel ashamed when they realize their spending is higher than they thought.
But here’s the truth:
If you’re saving enough and living within your means, there’s no shame in spending money on a life you enjoy.
Spending isn’t the enemy—unconscious spending is.
When we understand where your money is going, we can design a retirement plan that supports the lifestyle you love, without guilt.
Want a Retirement Plan That Reflects Your Real Life?
At Impact Wealth Management, we help clients retire with confidence by focusing on reality—not just rules of thumb or generic budget templates.
If you’re not sure how much you’re spending—or how your spending habits might affect your retirement plan—let’s talk. We’ll help you gain clarity, without shame, and build a plan that truly fits.