Megan McArdle echos some crackpot figures from the Wall Street Journal that says we need $75,000 per year during retirement. Huh? That seems awfully high to me. My folks don't have anywhere near that much coming in, and they're doing just fine, thank you.
It turns out that my family is on a rather strict budget, and I know exactly where the money goes for the things that we'll still need during The Golden Years...
$700/month for the house (no mortgage)
$550/month for utilities
$600/month for cars
$250/month for doctor bills
$600/month for dining, gifts, and travel
$800/month for personal expenses
That's $3500/month or $42K per year (assuming we pay off the mortgage and the kids leave home by the time we're 65). We expect to get about half of that in Social Security benefits, and so we'll need another $20K per year to cover all the expenses we have now. But, using my parents as a guide, your expenses during retirement drop significantly (unless you're expecting to take regular four-week vacations in Pango-Pango).
Oh, and there's income taxes. But I plugged numbers into the 1040A and my state's income tax form, and it doesn't look like the tax burden will be any higher than $1000 a year.
So, where did this $75,000 per year number come from? Who would want to spread this sort of misinformation? Could it be.... SATAN?!!? Or perhaps it's his devil's advocates on Wall Street who what to scare everyone to hand over more of their cash for "safe keeping". Perhaps.