There is little doubt that spending patterns often change upon retirement and during different stages of retirement. And many retirees are, of course, under financial pressure to stretch their dollars further.

As part of their long-term retirement planning, smart investors typically estimate how much income is necessary in retirement to finance an intended lifestyle and how much capital is required to generate that income. And upon retirement, careful budgeting to live within their means is a key priority.

As the Association of Superannuation Funds of Australia (ASFA) notes, retirees usually don't spend as much on housing because most have paid off their mortgages by retirement and they don't spend much on education.

However, retirees usually spend a large part of their budget on electricity, food, health, transport and recreation. (ASFA's Retirement standard update aims to indicate how much income is needed for what is described as a "modest" or "comfortable" lifestyle in retirement.)

AutoWeek magazine in the United States recently put a twist on budgeting for retirement with an article, Best cars for retiring baby boomers .

Although the article features a photo of a silver grey 2012 Porsche 911 - hardly within the price range of all but a few retirees - gives some practical, money-saving tips for retirees of lesser means.

The importance for retirees of a car with a reasonable purchase price, inexpensive maintenance, excellent fuel economy, competitive insurance and reliability are emphasised.

Not all of the cars covered in this article are on the Australian market. Nevertheless, its broad tips for choosing a suitable retirement car are highly relevant.

After all, ASFA's Retirement standard indicates that retirees tend to spend more on transport than on their health - sometimes much more.

And a final tip for the vast majority of retirees: forget the silver Porsche.

By Robin Bowerman
Smart Investing
Principal & Head of Retail, Vanguard Investments Australia
31st December  2012