When I recently told a former colleague who's nearing retirement that seniors commonly need 70% to 80% of their former income to cover their living costs once they stop working, he was quick to argue that my figures were highly exaggerated. For one thing, he expects to have his home paid off, and that alone is apt to lower his spending come retirement. Between that and not having to pay to commute, he's bound to save a decent chunk of money compared to his current expenses.

Now he does have a point. And it is very common for seniors to see their regular spending go down once retirement kicks off.

But you may not end up shrinking your spending as much as you expect to in retirement. Here's why.

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Source Fool.com