By Mara Lee | RISMEDIA, Tuesday, April 09, 2013— (MCT)
Conventional wisdom says you need 70 percent of pre-retirement income to keep the same lifestyle after you stop working.
That makes sense if you’ve been putting away more than 20 percent of your income in your final working years. With those savings, and no more work-related expenses for commuting and dry cleaning, you’d probably get away with a lower income.
But if you weren’t saving heavily to the end, it’s hard to see how you’ll reduce expenses 30 percent instantly at retirement unless you’ve paid off the mortgage.
In 2010, the most recent data available from the Federal Reserve Survey of Consumer Finances, 40.5 percent of households nationwide where the head was between 65 and 74 years old were paying a mortgage. Read more…