It truly does seem odd to me that so many people appear to assume that retirement automatically means less income. (The widow living on nothing but a Social Security check--and with "more month than money," as the old saying goes--is the prototype for this.)

I retired over 15 years ago; and I am currently far better off, financially, than I ever was previously.

Of course, my particular case should not be viewed as emblematic of everyone else.

But neither should that widow, living on "nothing but a Social Security check," be seen as typical of all.

Comments?

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"In his second inaugural address, [Franklin D.] Roosevelt sought 'unimagined power' to enforce the 'proper subordination' of private power to public power. He got it…"—George Will, July 8, 2007

The term "Saving for a rainy day" is out the window...

Longterm money management almost ALWAYS depends on one person in a marriage/couple...and there's a 50% chance that person will pass on first, and there's a chance that person didn't have much set up, leaving the remaining person in desperate need...

If a couple is financially OK because of one person's pension and that person moves on, that pension doesn't necessarily move to the spouse or next of kin...leaving the still-living spouse with the same bills but without the checks to cover them...

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"You get the respect that you give" - cnredd

The term, I believe, is 'replaceable income'.

When one is no longer actively receiving income from employment, and is relying on what has been saved plus investments (if they have them) and social security, they don't have a method of replacing what is spent, or if it happens, emergency medical costs, loss of a spouse (if there is one) or other various unexpected expenses. If they take into consideration their personal health situation and current expenses, average number of years in future retirement, and divide that into what they actually have in the way of funds or assets they could liquidate, they may adjust their style of living accordingly.

As to the 'Widow living on a Social Security check', you have to remember, back in the day women were not the primary earner in the house, and many were financially ignorant. The average Joe didn't have major investments, much life insurance or money squirreled away. The loss of a spouse quite often meant loss of a house, and other assets to pay off debts.

Things have change, some. People in general have become more financially savvy, with some exceptions. However, those who rely just on Social Security as their retirement means, will always be with us.

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Your life is the sum total of the choices you make.
If you don't laugh at yourself, a whole bunch of people will volunteer to do it for you
I never lose. I either win, or I learn....

To the extent people develop a financial plan for their retirement at all the projections for full income replacement require far too much sacrifice from current income. They are apt to view the goal as impossible and so discard the entire exercise of retirement planning. I want to retire early becomes I'll work til I drop.

Social Security was sold as a base income to keep old people out of poverty. At the time it was implemented average life expectancy was around 62 with pension benefits beginning at age 65. Of course if you died before collecting your pension the beneficiary was the Federal government.

In our advanced modern age life expectancy has increased while the minimum age for pension benefits has declined. Even more significant is the belief that the Federal government is obligated to provide you with the income to support the lifestyle of your choosing in retirement. If SS alone is insufficient to do this, it's not your fault you have been "left behind" by a society run by the greedy rich. You are a hapless victim.

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What is a 30 something year old single man with a rock in one hand and a Honduran flag in the other?

An asylum seeker.

The goal, however, need not be "full income replacement." That is because in retirement, there are far fewer expenses than previously existed: Presumably, the mortgage will have been paid off, for example.

And the kids will have grown up entirely; so there is no further need to pay (or even help pay) their college tuition.

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"In his second inaugural address, [Franklin D.] Roosevelt sought 'unimagined power' to enforce the 'proper subordination' of private power to public power. He got it…"—George Will, July 8, 2007

You are making assumptions. Many people use their homes like an ATM refinancing when they want cash. The mortgage never gets paid off. Obamacare reset the age standard for independence to 26 but it can be later still.

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What is a 30 something year old single man with a rock in one hand and a Honduran flag in the other?

An asylum seeker.

I see retirement more as requiring less income. Once I retire I will no longer be paying 6.2% of my income to social security, I will no longer be setting aside 20%+ of my income towards retirement savings. There you have it, I've already reduced my cost of living by 26% when I retire.

You mention widows....
My mom is a widow, my father died 2 years ago. Mom is living off social security plus his $200/month pension and she is doing fine. She lives in the Monterey Bay area of CA which is an extremely high cost of living area.

You are correct in all this.

The "assumption" that I am making is simply that the person under consideration is reasonably mature--and reasonably responsible.

If he (or she) is, then he (or she) will have a fairly robust savings account; and will, therefore, not refinance in order to receive some cash.

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"In his second inaugural address, [Franklin D.] Roosevelt sought 'unimagined power' to enforce the 'proper subordination' of private power to public power. He got it…"—George Will, July 8, 2007