What's it Going to Cost to Retire?

Try this little exercise: Close your eyes. Flash forward in time. Picture yourself retired and living the good life. What does "the good life" look like to you? Contemplate how your major expenses might be different from what they are today. Here are some things to consider:

• Some expenses may go down, including housing, clothing, and taxes.
• Some expenses may go up, including health care, insurance, recreation, and travel.

Your retirement expenses mostly will depend on the lifestyle choices you make. You could become an expert downsizer and be perfectly happy living on a fraction of your former income. On the other hand, if you envision yourself being profiled in the "High Roller" section of The Retirement Gazette, your expenses could actually increase after you retire. Regardless of which road you take, it's interesting to note that recent polls suggest most retirees tend to underestimate their income needs. And one thing is for sure, no matter what lifestyle you choose, you'll want to be financially secure.

One more thing to keep in mind: With life spans steadily increasing, you could spend up to 30 years or more in retirement. So whatever lifestyle expenses you create, your retirement income may have to last a long, long time.