Welcome to the third of four April posts about my retirement planning experience in honor of Financial Literacy Month. I wrote about my preparations for retirement over the years in the first post, and in the second, the sources of income I expect to receive in retirement. Now I turn to my retirement expenses.

Figuring out future living expenses is a guessing game. I won’t need to replace my current income — rules of thumb say to plan to live on twenty to twenty-five percent less than preretirement income. Travel and other pursuits could push expenses higher. My life won’t change much, so I expect my cost of living will be more or less the same as now.

Inflation is another question mark. How fast prices will rise in the next thirty years is anyone’s guess. Over time, the difference between two percent and three percent — the rates most often used in projections — is huge. I go with whatever my planner suggests.

A ballpark estimate of my retirement living expenses gives me an idea how long the money in my retirement accounts will last. I really don’t want to work for anyone else again — especially at a place like Walmart or McDonald’s. With apologies to anyone expecting an inheritance, my goal is to fall over dead the day I spend my last penny.

After years and years and years of spending more than I earned, I finally became a saver. At least, that’s what I tell people. In truth, I make enough money to spend AND save. At heart I’m still cheap, but thrifty flew the coop when I no longer needed to watch every penny. There’s not much I want these days, but what I do want I get, and I don’t care how much it costs. I’m a grown-ass man, and it’s my money.

The formula to calculate how long my savings will last, however, provides a HUGE incentive to live on less. Cutting expenses is a zero-sum game that pays off on both sides of the equation. Every dollar I trim from current spending is another dollar saved and another dollar I won’t need in retirement. The less I spend, the more I save and the longer the money will last. Win, win, win.

My new awareness of this reality has had a dramatic impact on my spending decisions. Thrifty is in again, and I’m on it. Next time, I’ll share the pay-off from all my efforts and and lessons learned.