A pinch of salt, a crowd of onlookers. Rough estimates may be fine for some things. But as retirement inches closer, you may want a clearer picture of whether you’ll be able to meet your expenses. The good news is that it’s possible to get more precise with your retirement expense planning—if you’re willing to spend a little time looking into the future. Here’s some information that can help.

About expense-based retirement income planning

Chances are, you’ve used rule-of-thumb estimates to figure out your retirement income needs at some point in your retirement planning process. But if accuracy’s important to you, you should consider basing your estimates on what you might plan to do—and how much you plan to spend. This approach is known as expense-based retirement income planning. 

To perform expense-based planning

1  Start with an estimate of your actual projected expenses.

2  Subtract out the sources of income you know about—including Social Security and pensions.

3  As a result, both your projected income gap and targets for filling it can be more  precise—and transparent—than those based on a broad estimate.

Our retirement planner can provide a strong start to expense-based planning

Your retirement plan website has tools to help make things simpler. For instance, our retirement planner¹ uses data from many sources to help you project basic and nonessential expenses based on information from your account and answers that you can provide. Visit myplan.johnhancock.com to personalize your retirement strategy now.

For a more customized approach, start your retirement expense analysis with these common expenses

According to John Hancock’s planning specialists, the following expenses can drive much of the day-to-day costs of living in retirement.

Another pathway into expense-based planning is to identify what you’d like to accomplish in retirement, then attach a price tag to it. This kind of lifestyle-based planning can add a rewarding dimension to preparing for retirement—by making sure you account for the times that will matter most. 

Plan for important retirement pursuits that could affect your future spending, and use the retirement planner companion worksheet to help budget for specific essential, healthcare, and nonessential expenses you’ll have in retirement.

Picture your lifestyle in retirement and start planning today

Retirement is a chance to do what you want—and enjoy the fruits of all you’ve accomplished. Once you have a good idea of what your retirement will look like, think about the details that will make it just right and make sure your income strategy can help you achieve it.

1 The projected retirement income estimates for your current John Hancock accounts, future contributions, employer contributions (if applicable), and other accounts set aside for retirement used in this calculator are hypothetical, and for illustrative purposes only, and do not constitute investment advice. The projected retirement expense estimates used in the calculator are based on proprietary algorithms and predictive analytics. They are also hypothetical and for illustrative purposes only. Your retirement readiness score/calculation results from a comparison of your projected income and projected expenses in retirement and is also hypothetical and for illustrative purposes only. Please review the "calculations and assumptions" section for additional detail. When calculating your retirement readiness, you should always consult with your personal financial and legal advisors. Results are not guaranteed and do not represent the current or future performance of any specific account or investment. All investments carry a degree of risk, and past performance is not a guarantee of future results. Due to market fluctuations and other factors, it is possible that investment objectives may not be met.