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My retirement planning diary (Part 3): How much am I likely to spend in retirement?

Read part 1 and part 2 of Barbara’s Retirement diary.

Like everyone preparing for retirement, I’m about to take a step into the unknown. One of those unknowns is how much my new lifestyle is going to cost.

So, after spending the past few months tracking my super balance up and down with every zigzag in Donald Trump’s tariff policy, it’s time to focus on the other side of the ledger.

I need to work out how much I’m likely to spend to lead the life I want to live in retirement. Only then can I work out how much income I’ll need and whether I have enough super to take the plunge.

I’ve drawn up a preliminary annual budget but, to get the ball rolling, I looked at some popular methods of estimating retirement income needs put forward by various industry bodies. These boil down to two main approaches: target replacement income and budget standards.

Target replacement income

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