In the early days of investing, if someone wanted to make an equity investment, they purchased individual shares of stock, and achieved diversification by purchasing shares of a number of different stocks. Similarly, if an investor wanted exposure to debt, they purchased individual bonds, and achieved diversification through purchasing bonds of various companies, with varying maturities.
In our experience, people tend to spend as much in the first decade of retirement as they did in their pre-retirement years. This is primarily due to increased travel and active lifestyles involving high level spending.
Therefore, the process of figuring out how much is needed in retirement begins with an accurate budget that specifically delineates spending habits in the years just preceding retirement.