Re: Is this the source of the 80% "urban legend"?
UH is one of FundAlarm's best posters, and that board has lately been deluged with "Can I retire now? How 'bout now?!" questions. This new surge of business can't be any worse than reading about it in the WSJ or Newsweek... we'll know it's working when the FundAlarm moderator ERs.
If we ERs aren't well-adjusted & real, then who the heck do we have to blame? Quick, take a mental inventory-- if you're not feeling well-adjusted then maybe you need to think about going back to work. Good, I knew that'd make you realize how well-adjusted you are.
As for the 70-80% question, I think I'm getting close to the answer. I've read "somewhere" that the % was based on a 1980s study. The study examined typical expenses like commuting, drycleaning, lunching out, childcare, gardeners & housecleaning, and other "work-related" expenses. Then it assumed that those expenses vaporized in retirement. Of course we all know that the study didn't address all of the issues and that it has been widely misquoted/misapplied.
I've been plowing through the literature (stimulating oeuvres like RAND's "The Retirement-Consumption Puzzle: Anticipated and Actual
Declines in Spending at Retirement" at
http://www.rand.org/labor/DRU/DRU3009.pdf) and I believe that the source was a NBER paper written by U Texas professor Daniel Hamermesh in 1984. It might be either " Life-Cycle Effects on Consumption and Retirement" or "Consumption During Retirement: The Missing Link in the Life Cycle". OTOH the guy has a 25-year history of writing NBER papers and he's pretty prolific as shown at
http://www.nber.org/cgi-bin/author_papers.pl?author=daniel+hamermesh . (Apparently his research hasn't led him to an actual retirement yet.)
But when I try to access the articles, NBER and other journals want money for their archives. I'm not averse to spending the $5-$10 or to haunting the stacks of my local university library, but does anyone else have a better way? Anyone here know Dr. Hamermesh or his research? Anyone know how to obtain a free copy of his paper? Anyone know the source of this urban legend?