You've read it countless times -- you'll spend less during retirement. You've nodded your head at this sage advice, imagining all those work lunches you'll be avoiding, the work clothes you won't be buying, the gas you'll be saving. You've got a whole retirement plan based around the fact you'll spend around 70% to 90% of your pre-retirement income once you've left the workforce.

There's just one problem: Actual data shows the "fact" of reduced spending after retirement is nothing more than a myth. And, if you've fallen for it, you could end up paying for this mistake when you can least afford to. 

Broken piggy bank.

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Will you really spend less during retirement?

While it's commonly believed spending will fall in retirement, there's ample research to suggest the opposite is true. Data from the Employee Benefit Research Institute shows close to half of all senior households across all income levels spend more during their first two years of retirement and around 1/3 of senior households kept up their higher spending six years after leaving the workforce.

Almost 30% of households exceeded pre-retirement spending by 120% during the first two years of retirement, while 23% of households continued to exceed pre-retirement spending by this amount even after six years . 

Senior spending tends to follow predictable patterns during retirement. Soon after retiring, seniors increase expenditures on optional activities -- like travel and hobbies. This early spending can deplete a nest egg, adversely impacting future income. As health starts to fade with advancing age, spending generally falls temporarily -- but ratchets back up as tending to health issues becomes costlier .

These spending patterns make it especially dangerous to underestimate the amount you'll need to save. If you blow through a lot of your nest egg while enjoying the early part of retirement, you may not have the money available when you really need it to pay for essential healthcare services late in life.  

This is why you'll probably spend more

Despite the common misconception that spending falls after retirement, there are a lot of reasons why it actually rises. For one thing, more seniors than ever before are retiring with debts, including mortgage and student loan debts. This means you'll need to continue to budget for these monthly bills even after you've left the workforce.

Healthcare, however, is typically the biggest factor when it comes to increased senior spending. Medicare provides far less comprehensive coverage than many people believe, and seniors who need a lot of prescription drugs may require as much as $350,000 during retirement just to cover costs associated with basic medical needs. Long-term care costs, such as the cost of a nursing home, are also not covered by Medicare and are not included in this estimate. These costs can total thousands more, with the average annual cost of a private room in a nursing home coming in at $92,000 in 2016 . 

Healthcare spending increases as you get older, with seniors 75-and-up spending as much as 15.6% of their annual household budget on healthcare compared with 8.8% for people ages 55 to 64 .   The likelihood of requiring costly long-term care also rises the longer you live. 

Unfortunately, healthcare spending -- including nursing home spending -- is not optional for most seniors, which makes cutting a household budget difficult -- even if you are running short on retirement funds because you based income estimates on the misconception you'd spend less during retirement. 

How much should you be saving?

Because there's a good chance you'll actually spend more during retirement, it's best to err on the side of caution and set your retirement savings goals to replace at least 100% of your income.

You can generally expect Social Security to replace around 40% of your pre-retirement income , which means your savings would need to be sufficient to produce the remaining 60%. If you earn the median salary of around $51,272 and your Social Security replaces $20,508 of that salary, you'd need your savings to produce an income of around $30,764 to replace 100% of your income.

If you're 35 now, plan to retire at 67, will draw from your retirement for 20 years, and earn 7% on investments before retirement and 4% after, you'd need a nest egg of around $1.3 million to replace 100% of your income, assuming a 3% inflation rate.  If you planned to replace just 70% of your pre-retirement income, on the other hand, your nest egg would only need to be $696,022 . If you've based your retirement savings goals on the lower number, you could be almost $600,000 short when your spending actually rises. 

You definitely don't want to find out when you're 75 that your more than half-a-million short of being able to afford the care you need! Instead of shortchanging yourself, aim for the higher retirement goal. If you end up being healthy and not needing costly care, you'll have more money to spend on travel or leave to your children -- and if you do get sick, you'll have the confidence of knowing you can cover your costs without going broke.