Why Modern Retirees May Need More Income Than Ever Before
Sarah Thompson (name changed) thought she had it all figured out. After 35 years in corporate marketing, she had diligently saved, following the traditional financial advice that she’d need about 80% of her pre-retirement income to maintain her lifestyle.
But two years into retirement, she faced an uncomfortable reality: her carefully planned budget wasn’t stretching as far as she’d anticipated. With rising healthcare costs, supporting her adult daughter during a career pivot, and enjoying golf, travel, and time with grandchildren — Sarah realized she needed more income in retirement than she did while working.
The 80% Rule Is Losing Relevance
Sarah’s story isn’t unique. Many retirees today are discovering that the conventional “80% of pre-retirement income” guideline simply doesn’t reflect modern retirement living. Longer life expectancy, evolving lifestyles, inflation, and family dynamics have changed the game.
The Evolution of Retirement Living
- Pensions were common
- Healthcare was affordable
- Life expectancy was shorter
Today’s retirees face:
- Higher healthcare and insurance costs
- More active “early retirement” years
- Family support obligations
- Increasing longevity risks
The 100% (or More) Retirement Income Framework
Advisors are now recommending retirees plan for 100% or more of their pre-retirement income, especially in the first 10 years.
The Adventure Phase (Early Retirement)
100–120% of income may be needed to support travel, hobbies, and “bucket list” pursuits.
The Lifestyle Balance Phase (Mid-Retirement)
90–100% is common as discretionary spending declines, but healthcare and home costs rise.
The Comfort & Care Phase (Late Retirement)
100%+ ensures a buffer for medical and support services — preserving dignity and stability.
Hidden Cost Drivers for Modern Retirees
- Healthcare Inflation: $165,000+ average lifetime cost for a 65-year-old
- Technology: Monthly expenses for devices, internet, and streaming
- Family Support: Financial help for adult children or aging parents
- Longevity Risk: Planning for 30+ years of income
- Cybersecurity: Investment in financial protection tools
- Inflation: At 3%, prices double in ~24 years
How to Build a Sustainable Retirement Income Strategy
- Dynamic Withdrawal Planning: Adjust income to life phases and markets
- Strategic Asset Allocation: Balance growth and income
- Multiple Income Streams: Social Security, investments, real estate, part-time work
- Buffer Assets: Reserve accounts for downturns or emergencies
- Professional Reviews: Annual plan check-ins
- Healthcare Planning: Include long-term care and supplemental insurance
✅ Take the First Step Toward Income Confidence
Retirement shouldn’t feel like an unpaid part-time job.
Let’s help you build an income strategy designed to support a vibrant retirement — from early adventures to late-stage security.
📅 Schedule a complimentary retirement income review with Whalen Financial
📚 Additional Resources
Explore our Retirement Encyclopedia to understand withdrawal strategies, advisor vetting tips, tax planning, and more.
🔒 Disclosures & Compliance Notices
This article is intended for general educational purposes and does not constitute personalized financial, tax, or legal advice. Examples and case studies are hypothetical illustrations and may not represent actual clients. Any similarity to real individuals is purely coincidental.
Whalen Financial is an SEC-registered investment adviser. Registration does not imply a certain level of skill or training. Advisory services are offered only to clients or prospective clients where Whalen Financial and its representatives are properly licensed or exempt from licensure.
Published: April 2025. This content is archived in accordance with SEC Rule 204-2 and reflects information current as of the date published.
