Q: Do people underestimate how much they will spend in retirement?

A: Not necessarily.  In fact, it is easy for a financial plan to overestimate spending.  A growing body of research shows that the average retiree buys slightly fewer goods and services each year throughout retirement. Therefore, a worker could overestimate the amount needed to retire if he or she assumed that all spending was going to grow at 3% per year for 20-30 years. Read: Retirement Spending – Are You Overestimating.