The pre-retirement budget app

Per BLS Consumer Expenditure Survey data, the average US household headed by someone 65+ spends roughly $52,000-$58,000/year — about $4,400-$4,800/month. That's roughly 70-80% of pre-retirement spending for most households, though the shape differs significantly. Housing remains the largest line (32-35% of spending), but with mortgages often paid off, the cost shifts to property taxes, insurance, utilities, and maintenance. Healthcare rises to 12-15% of spending — Medicare premiums, supplemental insurance, prescriptions, out-of-pocket costs. Transportation drops as commuting ends. Food spending shifts slightly higher (more cooking, less work-paid meals). The honest framing: retirement spending isn't lower than working-life spending — it's different. Testing your category shape against this benchmark 5-10 years out helps you spot gaps.

Ideally 5-10 years before your target retirement date. That gives you enough data to see real spending patterns (not just the optimistic estimate) and time to adjust either the budget or the retirement date. Most pre-retirees who track for 24+ months before retiring find at least one category that surprises them — usually travel, dining, or healthcare. Cash Compass's annual view becomes useful once you have 12+ months of data; the year-over-year comparison shows whether spending is trending up or down. The decision-relevant number is your real annual spending in retirement-shape categories, not a generic 'rule of thumb' multiple. A household spending $80,000/year today won't necessarily spend $60,000 in retirement; it might spend $72,000 with a different mix.

Eight categories typically shift significantly. Healthcare rises 50-100% as Medicare and supplemental insurance replace employer coverage. Transportation drops 30-50% with no commute. Food at home rises 10-20%; food away from home varies (some rise with more travel, others drop with less work-related dining). Travel and recreation often rise 50-100% in the first 5-10 years of retirement. Housing maintenance and property taxes typically rise (older homes need more upkeep, taxes rise faster than retirement income). Insurance changes shape (less life and disability, more long-term care consideration). Subscriptions and household services often rise (more time, more interest in services). Gifts and charitable giving frequently rise. Cash Compass tracks each separately so the new shape becomes visible by month 3 of retirement.

Withdrawal sequencing is its own optimization problem and worth a few hours with a fee-only fiduciary advisor if your portfolio is significant. The basic framework: spend from taxable accounts first (capital gains taxed lower than ordinary income), then traditional 401(k)/IRA, then Roth IRA last (longest tax-free compounding). Most pre-retirees underestimate Required Minimum Distributions — RMDs from traditional accounts start at age 73 (rising to 75 by 2033) and force taxable withdrawals whether you need them or not, which can push you into higher tax brackets and affect Medicare premiums (IRMAA surcharges). Roth conversions between retirement and age 73 are often the right move to reduce future RMDs. Cash Compass tracks the spending side; conversion strategy itself usually wants professional help.