New Reality-Based Retirement Planning Tool Announced

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The new Reality Retirement Calculator is an online financial planning tool that uniquely allows users to take into account the fact that spending in retirement tends to decline with age. Recognizing this simple fact can dramatically change an person’s retirement savings goal.

A new retirement planning tool, available at , may help baby boomers and others more realistically plan for their retirement.

Retirement plans and retirement planning models typically assume that households have the same spending needs at age 85 as they do at age 65 – only worsened by the eroding effects of inflation. Even with modest inflation assumed, the result can be a retirement savings goal that seems discouragingly unattainable.

Yet government data and research clearly show that spending actually decreases throughout retirement. As people age, there is a pronounced tendency to spend less. For example, U.S. Bureau of Labor Statistics data show that retired households age 75 and over spend less than younger retirees in every category of spending except healthcare (U.S. Bureau of Labor Statistics, Report 986, June 2005).

“During the early years of retirement, spending tends to rise as vacations, new cars, and other long-delayed rewards are purchased,” says Tim Paul, president of Sagetips, LLC. “However, after several years in retirement, spending tapers off particularly for things like entertainment and transportation.”

The Reality Retirement Calculator allows retirement planners to take this essential fact into account.

The result is a more realistic retirement plan that, while recognizing the effects of inflation, also takes into consideration the natural tendency for retirees to spend less as they age. Users often find that projected retirement needs using the “reality” approach are 20% to 30% lower than with traditional retirement planning models.

“Clearly, this has important implications for anyone considering a reverse mortgage as part of their retirement planning,” Paul notes.

Of course no retirement calculator can substitute for a detailed retirement plan prepared after consultation with a qualified financial planner.

The Reality Retirement Calculator is available at The calculator is also freely available for downloaded.

Corporate information

Sagetips, LLC owns and operates websites providing independent information on specific personal finance issues including reverse mortgages ( HELOC loans ( ) and colleges savings reward credit cards ( ).

Press Contact: T.J. Paul

Company Name: Sagetips, LLC



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