7 steps to forecasting your cash flow needs in retirement

New retirees frequently rhapsodize about the joys of tossing their alarm clocks into the trash and filling their days with whatever activities they find gratifying. But if they’re honest, most new retirees find the financial aspect of the retirement transition to be a little jarring. While retirees are often counseled to estimate that they’ll spend 75% to 80% of their working incomes in retirement, research shows that higher-income, higher-saving households may need just 60%, or even less, of their preretirement income during retirement, while lower-earning, lower-saving households may need closer to 90%. Following certain steps can make it easier to estimate your cash flow needs after you retire.