What retirement actually costs
Spending is the input you control most — and the one most people model least carefully. Three refinements turn a guess into a plan.
Your retirement spending isn't one number. It's a handful of categories that behave differently: needs vs. wants, costs that inflate fast vs. slow, and expenses that start and stop at different ages. Model those three things and your plan gets dramatically more honest.
Refinement 1 — Needs vs. wants
Non-discretionary expenses are needs: housing, food, utilities, insurance, healthcare. Discretionary expenses are wants: travel, dining out, hobbies, gifts.
The split matters because bad market years don't cancel your grocery bill — but they can postpone a vacation. Vundii's simulation uses exactly this logic: when a simulated future hits a rough patch, discretionary spending flexes down first, which is how real retirees behave. A plan whose "needs" are covered even in poor markets is fundamentally safer than one where every dollar is locked in.
Refinement 2 — Not everything inflates alike
Using one inflation rate for everything quietly distorts a 30-year plan, because the categories drift apart enormously over time:
- General living: ~3% per year
- Healthcare: ~5–6% — the fastest-growing cost most retirees face
- Travel & leisure: ~2–3%
- Fixed payments (a fixed-rate mortgage): 0% — the payment never grows
Example: $1,000/month of healthcare at 5.5% inflation becomes about $2,900/month in 20 years. The same $1,000 of fixed mortgage payment is still $1,000 — and then disappears entirely when the loan ends. Treating both as "$2,000 of spending at 3%" gets the future meaningfully wrong in both directions.
Refinement 3 — Expenses that start and stop
Real spending has a shape. The mortgage ends at 68. Travel peaks from 65–75 (the "go-go years"), then tapers. Healthcare rises late. A child's college ends. Vundii lets you give every expense a start age and end age — and one-time costs (a roof, a wedding, a boat you'll deny wanting) get entered once at the age they hit.
Plans modeled this way often look better than flat-spending plans, because flat models keep charging you for a mortgage you paid off and travel you stopped doing at 85.
What Vundii shows you
- The Expenses page holds the categories: each with its own amount, inflation rate, start/end ages, and needs/wants flag.
- The Cash Flow page shows the consequence — year by year, income vs. spending, with green surplus years and red drawdown years, plus your annual withdrawal rate (keeping it under 4–5% early on is the classic sustainability check).
What to do about it
- Start with one total number if that's what you have — a rough plan today beats a perfect plan someday.
- Split out healthcare first and give it 5–6% inflation. It's the single most consequential refinement.
- Give your mortgage an end age and 0% inflation.
- Mark true discretionary spending as discretionary — you'll see your plan's resilience improve, honestly.
- Then check Cash Flow for any years where the withdrawal rate spikes — those are the years to plan around.
Related terms: inflation rate · safe withdrawal rate · Guyton-Klinger guardrails
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