What the Surveys Don't Say About Your Retirement Income Needs

NEW YORK (TheStreet) -- What will it take for a satisfying retirement?

Not as much as you think, perhaps.

Financial experts have kicked this question around for decades. The oft-quoted rule of thumb says the average retiree needs 70% of pre-retirement income to maintain the same standard of living after quitting work. That assumes there will be no further need to save and that the mortgage is paid off and expenses such as commuting are a thing of the past.

But some have said that rule is obsolete. Because people are living longer, retirees must reserve some of the annual income for the future, meaning the income must be larger. And because yields on safe holdings such as bonds and savings accounts are so low, it takes a bigger nest egg to produce the same income. Some experts caution retirees against relying on the old rule about withdrawing 4% of assets per year, suggesting 3%, or even 2%, is more prudent. That can be pretty discouraging.

But occasionally there's some upbeat news, such as a study by T. Rowe Price, the mutual fund firm. "Retirees are living on less," the report says. "Nearly three years into retirement, retirees report living on 66% of their pre-retirement income on average. But that has not translated to dissatisfaction with their lifestyle: 57% report they live as well or better than when they were working."

Of those surveyed, 89% were between somewhat and very satisfied with their retirement so far, and 85% found they could be satisfied spending less then they did before retiring.

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