# Malcolm Hamilton on Retirement



## Saniokca (Sep 5, 2009)

Great video (nothing new but I love that guy). Make sure you watch all three parts.

http://watch.bnn.ca/moneytalk/february-2012/moneytalk-february-20-2012/#clip621789


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## leoc2 (Dec 28, 2010)

Saniokca said:


> Great video (nothing new but I love that guy). Make sure you watch all three parts.
> 
> http://watch.bnn.ca/moneytalk/february-2012/moneytalk-february-20-2012/#clip621789


Enjoyed the videos thanks!


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## Russ (Mar 15, 2010)

I found the 3rd segment interesting - especially that old "70% - 100% of pre-retirement income" chestnut. Malcolm mentions that a lot people approaching retirement are enjoying the highest standard of living in their lives (mortgage paid off, kids gone). He seems to be assuming that they are spending all of their disposable income (therefore enjoying a high standard of living) and therefore they may need a high percentage of their pre-retirement income to sustain this standard of living.

But shouldn't people really be considering their pre-retirement consumption rather than income? I live on 60% of take home pay and save 40%, so I don't need 70% of my income in retirement. What I would like to have going into retirement is after tax income of 60% of my current take home pay (100% of current consumption). That's way less than 70% of gross income.

Let me check my math with an example:

say a person has family gross income = $100,000
family net income = $70,000
spends 60% = .6 x 70,000 = $42,000

To maintain same standard of living in retirement as before retiring:
retirement net income = $42,000
retirement before-tax income = 42,000 x 1.25 = $52,500

This is 52.5% of pre-retirement income.

Does this make sense? Isn't this a concept Malcolm talked about in the past? I must have heard this somewhere, but where?


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## DanFo (Apr 9, 2011)

Pretty sure in the videos he stated although one gets used to their highest income immediately before retirement they should be comfortable with the income they had after their most expensive years when the kids were still at home, which should make sense. My current plan is to retire with a pension(private) of 54% of my working income which for me would provide a very nice lifestlye..if one must live with high end trinkets they might suffer more....My other savings/investments should provide a decent buffer for things that might may pop up in retirement.


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## Square Root (Jan 30, 2010)

Good points. I think the problem is that many(most?) people don't understand their spending. Having an accurate understanding of where you currently spend is the first rquirement of how much you will want to spend in retirement. One size does not fit all. We lived well below our means when working so we could ramp our spending up in retirement when we have more time to enjoy it. Retirement spending is about 30% more than when we were working. Not representative I know.


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