I think many of those later costs are not discretionary, like healthcare and home help. Although certainly reduced travel would be. My mom doesn't travel much any more, but does get to Las Vegas a couple of times a year. That can take care of extra income fast.
To the extent that there may be cost increases late in life that are non-discretionary, saying that "most" people have lower expenses late in life is like saying your SWR is 51% successful. Counting on reducing costs as you age is cutting any safety margin pretty slim in my mind.
What I think you are missing is that the lower expenses in later old age are pretty much across the board in most categories other than health care. (See the link in my prior post).
Some things that my mother in her late 80's spends less on than she did when she was younger:
Clothes - she doesn't have much need to buy new clothes. She has lots of clothes that aren't worn out. She has fewer occasions to go out. She spends more time at home with casual clothes. She may never have to buy any more clothes for the rest of her life, save for a few undergarments or shoes.
Food - She doesn't dine out as much. She does go sometimes but getting in the car and driving there is more of a chore than she likes. Also, her appetite is less now than it used to be. She doesn't eat as much food.
Housing - House is paid for. She doesn't do much refurnishing or redecorating. She does pay to have repairs made and she has an increased cost for paying for yard work and someone to clean her house, but she spends much less on discretionary household items.
Entertainment - Same as dining out. She doesn't enjoy going out to the movies or many other more entertainment oriented things. She might do a little occasionally but not a lot.
New technology - She saves a lot by not getting into newer technology. No internet, no smartphone (she does have a basic cellphone), no cable TV, etc. She never had these things so she doesn't miss them.
Auto - She still drives, but puts few miles on her car (which is almost 20 years old but still has low mileage). Her fuel cost is much lower than it used to be because she doesn't drive much. Not much cost for repairs or maintenance because she doesn't drive much. Your auto costs just are very much when you don't buy a new car in 20 years....
Yes, her prescription cost is higher than it used to be and she does have medical expenses. However, she is on medicare with a supplement and prescription drug plan so even her medical costs are relatively straightforward. If she needed long term care that would be a high cost, but unless and until she does almost every other category of spending has gone way down.
For most people the spending in virtually every category save health related go down during late old age. Again, I'm know there are exceptions but the data is clear that spending does usually go down.
) spending safely over what I normally spend in most years. That includes 3 or 4 weeks in foreign travel and several domestic trips. I can't imagine traveling that much when I'm near 80. Based on my family history, I'll be dead by then.
