{"id":68434,"date":"2025-07-16T23:49:09","date_gmt":"2025-07-16T23:49:09","guid":{"rendered":"https:\/\/www.europesays.com\/us\/68434\/"},"modified":"2025-07-16T23:49:09","modified_gmt":"2025-07-16T23:49:09","slug":"how-do-you-know-how-much-to-save-for-retirement-when-you-dont-know-what-itll-cost-to-live-in-the-future","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/us\/68434\/","title":{"rendered":"How do you know how much to save for retirement when you don’t know what it’ll cost to live in the future?"},"content":{"rendered":"

Pay Dirt is Slate\u2019s money advice column. Have a question? <\/strong>Send it to Kristin and Ilyce here<\/strong><\/a>. (It\u2019s anonymous!)<\/strong><\/p>\n

Dear Pay Dirt,<\/strong><\/p>\n

Being prepared is important to me, and I\u2019ve tried to save at the rates that financial experts suggest. But there\u2019s something that is really bothering me.<\/p>\n

I know a lot of the big investment firms suggest having various multipliers of your income invested at various ages. And the FIRE people are all about the safe withdrawal rate. I\u2019m at or ahead of those benchmarks. Those estimations seem to assume your budget\u2019s going to be roughly constant once you adjust for inflation. Sometimes they say your budget will maybe drop a little in retirement, since you won\u2019t need work clothes, a parking permit, etc.<\/p>\n

But while I know what my budget is now, I\u2019m pretty sure that health care costs are going to go up faster than inflation. I don\u2019t see how I\u2019m supposed to be able to accurately predict what that\u2019s going to be in decades, and I\u2019m only 43. How are we supposed to know what retirement will cost decades from now?<\/p>\n

\u2014Lacking a Crystal Ball<\/p>\n

Dear Crystal Ball,<\/strong><\/p>\n

    \n
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    Help! I Pretended to Be My Ex in an Email. It Ruined His Life.
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  2. \n <\/p>\n

    Help! My Sister Wants Me to \u201cInvest\u201d in Her Plan for Getting Rich. Oh God.
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  3. \n <\/p>\n

    Help! I\u2019m a Rich College Kid. My Friends Have No Idea What I Want to Do for Them.
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  4. \n <\/p>\n

    My Wife Promised My Daughter an Expensive Gift. I\u2019m in Agony About What My Family Will Think.
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    You\u2019re right\u2014it\u2019s impossible to precisely predict what retirement will cost decades from now. In some ways, the whole system of retirement planning is built on educated guesses. For the most part, though, those educated guesses are based on historical data\u2014the best we have\u2014and they\u2019ve played out in a fairly stable way. But you have a point that there are other circumstances to think about, and healthcare is a big one.<\/p>\n

    Being at or ahead of the existing benchmarks at least puts you in a pretty good financial position, even if the benchmarks themselves are sophisticated guesswork. The fact that you\u2019re thinking about this now and already saving aggressively means you\u2019re building in a buffer for all the unknowns that the standard calculations don\u2019t really account for. The best approach is to keep doing what you\u2019re doing while acknowledging that those \u201csafe\u201d withdrawal rates might turn out to be overly optimistic. Use the saving calculators as a starting point, but plan for the future according to your own concerns\u2014what you feel comfortable with, not what some FIRE calculator tells you.<\/p>\n

    The reality is we\u2019re all just making our best guess, hoping for the best, and adjusting as we go. That\u2019s true in money, but it\u2019s also true in life. The fact that you\u2019re aware of the limitations and still planning ahead puts you way ahead of most people.<\/p>\n

    \u2014Kristin<\/p>\n

    More Money Advice From Slate<\/p>\n

    My husband grew up poor in a single-parent household. I grew up better off, with both parents making six figures. My parents were both good at saving, and good at investing money wisely. My husband knows we were better off (multiple trips to Disney World, all the fancy \u201880s toys, a large house with two spare rooms), but I don\u2019t think he realizes just\u00a0how\u00a0well off. I\u2019m just wondering if I should prepare him in some way for when my mom passes away, or go the \u201cSurprise! We get a third of a multi-million dollar estate\u201d route. Should I surprise him? <\/a><\/p>\n

    The latest sex, parenting, and money advice from our columnists delivered to your inbox three times a week.\n <\/p>\n","protected":false},"excerpt":{"rendered":"Pay Dirt is Slate\u2019s money advice column. Have a question? Send it to Kristin and Ilyce here. (It\u2019s…\n","protected":false},"author":3,"featured_media":68435,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[15],"tags":[600,64,255,5597,67,132,68],"class_list":{"0":"post-68434","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-personal-finance","8":"tag-advice","9":"tag-business","10":"tag-personal-finance","11":"tag-slate-plus","12":"tag-united-states","13":"tag-unitedstates","14":"tag-us"},"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@us\/114865593773718635","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts\/68434","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/comments?post=68434"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts\/68434\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/media\/68435"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/media?parent=68434"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/categories?post=68434"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/tags?post=68434"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}