by KYW's Salil Gutt

The entire financial services industry is hanging its hat on the future needs of the 77 million baby boomers marching inexorably in the direction of retirement.  It would serve us well to learn from the experience of current retirees.

For instance, first, spending increases in retirement. This debunks the current theory of reduced expenses. Health care, home projects and travel are the primary culprits. Ideally one should develop a retirement budget from the ground up rather than relying on pat formulae.

Next. Kids and grandkids want things putting pressure on retiree finances. Children need help in buying homes, paying off debt, meeting college educational costs as some examples.  The challenge is in learning to say no or making allowances for these gifts in the retirement budget.

Finally. Inflation is a big deal today. Long forgotten for much of the 1990's it has reared its ugly head again. Costs for health care, food and energy are increasing much more than the rate of inflation. This is hard for people on fixed incomes. A solution is to project a compounded 5% increase of expenses until age 80. After age 80 expenses do fall.