The topic of your income needs is really outside the context of this blog's purpose. I'm including it however, because needs determine many times what direction you must go and affects the decisions you make. Tracking expenses could and should be part of your long term investment strategy at any age, but is most critical when you are getting close to retirement and need to understand what is needed. The first thing to do is to get a handle on your expenditures. Yeah, I know, this is not the first time you've heard this, but it's true. Unless you know exactly what you are spending your money on, you cannot evaluate the money needed to support your lifestyle and spending. My advice is to track expenses for at least three months without making any changes, preferable during the time you are still working. If you do this after you quit working, you may find out you will fall short, and do not have the income to stay above water. You really at this point want to find out precisely where every dollar is spent. If during this phase, you discover some obvious savings, by all means trim that fat. But it's best to see the picture of your expenses as they are really happening.
Once you've tracked expenses for a few months you will begin to notice trends. You will be surprised to find money being wasted or you will find you are spending much more on things than you thought (think Starbucks!). You will find you are spending money on non-essential things such as entertainment or eating out. Perhaps these are important to you and that's OK, just make sure you understand how these expenses add up to account for a sizable chunk of the money you spend and can easily be trimmed or eliminated if needed. You may look at your clothing purchases and determine some trimming could occur here as well. Ideally, you will track this information for a full calendar year, making sure you are capturing seasonal bumps and valleys due to weather, travel, and other random expenses such as emergencies and repairs.
Perhaps the habit of tracking expenses will continue and you will always have a handle on where your money is going.
The output of this effort is knowing what your household will need when things change as you transition from an earner to a spender. Most people who track expenses spend less, simply because they make the decision to buy or not buy at the time and not later.
I found a good source for learning about online tools for budgeting and tracking at: