(MoneyWatch) It's been widely accepted as retirement planning gospel that your retirement income needs to increase to account for inflation. Indeed, many experts say that the natural rise in the cost of living means that the monthly income you collect early on may not be enough to cover your living expenses in your later years.

But is this that necessarily so? Is it prudent or irresponsible to spend more in your early years of retirement -- your sixties and seventies -- assuming that you'll actually spend less in your eighties and nineties?

Given the meager level of retirement savings that most baby boomers have accumulated, knowing whether your income should increase for inflation could be an important issue. For one thing, if you don't need to plan for increases due to inflation, you can choose retirement income generators that help your retirement savings generate more initial income. (You can see how this works by looking at my April retirement income scorecard for immediate annuities.) For a married couple both age 65, $100,000 in retirement savings would buy an immediate fixed annuity that would generate an annual income of $5,840, or an inflation-adjusted annuity that would generate just $3,875 annually. The initial income for the fixed annuity is 50 percent higher than for the inflation-adjusted annuity.

IRA and 401(k) retirement drawdown: Don't die broke Retirement income scorecard: Immediate annuities

You'd see similar results if you used managed payouts to generate retirement income -- remember that a strict application of the four percent rule assumes you'll increase your retirement income each year for inflation. You might be able to justify withdrawing money from your savings at a much higher rate if you assumed you wouldn't increase your retirement income for inflation.

Some researchers have used data from the annual Consumer Expenditure Survey to imply that people spend less as they age. For example, financial expert Wade Pfau's excellent blog post, "How do spending needs evolve during retirement," summarized data from the 2010 Consumer Expenditure Survey to show that people age 75 and older spend 40 percent less than people age 55 to 64, and 26 percent less than people age 65 to 74.

The implication is that people spend less money on recreation, transportation, gifts, and other discretionary purchases as they reach their eighties and nineties. So do you need less money than you think to retire?

Before you hand in your retirement notice, consider a few limitations with relying on this type of data. First, it's entirely possible that retirees who are currently age 75 or older spend less money than younger retirees simply because they have less money to spend. This could be the case for a few reasons. For example, Social Security and pension benefits are based on a person's wage history, and recent retirees had higher real wages than older retirees. Thus, the retirement income of recent retirees could be higher than older retirees.

It's also possible that some older retirees have exhausted their savings and are now relying just on Social Security and pension benefits, if they have any, while younger retirees are still drawing on their retirement savings. The older retirees may not be making voluntary reductions in spending -- and they may not be too happy about it.

This data may also not be relevant to future retirees when you consider medical expenditures. Given the erosion of Medicare and retiree medical plans, and given that medical expenses are rising much faster than inflation, future retirees compared to current retirees may have to devote a much bigger chunk of their retirement income to medical costs.

Read more here:
Three ways to boost your retirement income