An actuarial study of retirement spending shows where most people miscalculate. There’s some good news in there.

The study looks at, among other aspects of retirement,  spending patterns and how much savings people need to fund those spending habits. The good news: If you’re like most people, and you’ve used the services of a financial planner or retirement calculator, you might be socking away too much. Here’s why:

The typical retirement-planning calculator uses your last working year’s income as the base for your first year of retirement spending and then adjusts that estimate up every year by the inflation rate.  In other words, if your income in the last year you worked was $100,000, the calculator sets that as the income you’ll need in the first year of retirement and adds a percentage each year based on inflation. If inflation is 3% after the first year, you’ll need $103,000, and so on.

That’s bad planning, according to the study, because the method assumes expenses are stable over time. They’re not.

In fact, retirement spending actually declines over time. Here’s the breakdown of annual spending by the average household in 2008:

• Between the ages of 55 and 64 — $54,783
• 65 and 74 — $41,433
• Over 75 — $31,692

That’s a 42% drop in spending as a person ages.  Food, housing and clothing  use up less income as time passes. Entertainment spending falls by about 65%. Tax liability begins to approach zero.

Here’s the bad part, or at least the part you should prepare for: Most people spend more than they expect in the first few years of retirement. That early period is typically when people feel healthy and able to travel and follow other pursuits that put a dent in retirement savings.  The study outlines the common four-part spending pattern over the retirement years:

1. Early retirement:  travel, home improvement, hobbies, and new wardrobes can raise expenses beyond workday levels.
2. Midretirement: the initial spending rush slows.
3. Late retirement: spending and physical activity slow even more.
4. End of life: spending for health care and personal assistance use up the bulk of your cash.

The summary of the report: Don’t expect your spending and expenses to drop right after you retire, unless you make a conscious effort to lower them. Do expect spending and expenses to drop as time goes on.