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Old 04-29-2015, 08:13 AM   #21
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I think I believe some of the older folks reduction in spending is due to no other choice. I.e. they don't have the remaining funds to spend more.
This would appear to be strongly supported by the Consumer Expenditure Survey. While spending declines across the age groups, income declines more rapidly beginning age 65, and at age 74+ spending exceeds income. While correlation is not causation, one cannot spend what one does not have.

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+1, This has been my experience with elderly relatives. In particular my mother is 93 and runs up some large bills with trips to the ER, hospital stays but pays very little out of pocket compared to the bill. Her secondary picks up most of what Medicare has left over which typically is not much.

Yes, the assisted living is another issue ....
The Morningstar paper (referenced in the OP link) said "medical as a % of total spending" went up for everyone and also actual healthcare spending increased for the upper income segment.

I think non-covered Medicare expenses, especially home aide care and assisted living, represent the lions share of this increased expense. They are so expensive, relative to other expense categories, it's easy to see them push up the averages and affect overall spending in this way.
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Old 04-29-2015, 08:32 AM   #22
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I'm skeptical that the population in the studies Cotton uses as a reference are representative of early-retirees (e.g., the high-spend category is defined at 30k and high net worth is 400k including present value of SS/pensions) BUT lets say you believe spending will decrease as you age (once you get to age 60-65 as per the study). What do you plan to do right now? perhaps increase your withdrawals?

For me, the age where spending goes down is far enough away that the uncertainty from portfolio returns totally dwarfs everything else.
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Old 04-29-2015, 08:39 AM   #23
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I know! But apparently people must not be spending those $$ on the things advertisers want us to buy.

OTOH we find ourselves buying more and more services, which involve much more $$ than "Things" do, but aren't advertised as heavily.

Plus, you can't just "buy a contractor" the way you'd buy a name-brand gas grill, and know what you're getting. Much more research and uncertainty is involved, and this is off-putting. We have found ourselves deferring maintenance, because finding someone reliable to do things you can't do for yourself can be such a hassle.

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That's especially funny because supposedly those folks 50 to 55 are in their peak earning years and it's the 55+ that have most of the net worth!
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Old 04-29-2015, 11:11 AM   #24
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I know! But apparently people must not be spending those $$ on the things advertisers want us to buy.

OTOH we find ourselves buying more and more services, which involve much more $$ than "Things" do, but aren't advertised as heavily.

Plus, you can't just "buy a contractor" the way you'd buy a name-brand gas grill, and know what you're getting. Much more research and uncertainty is involved, and this is off-putting. We have found ourselves deferring maintenance, because finding someone reliable to do things you can't do for yourself can be such a hassle.

Amethyst

I think that is really the crux of the matter. There is spending going on but older people have the reputation (and I am getting there) for being set in their ways, and less influenced by marketing pitches.... Depends, door opening bath tubs, and HurryCanes not withstanding!


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Old 04-29-2015, 11:13 AM   #25
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How many friends do have that are in their mid 80s? - I eat breakfast with a few of them a few times a week. Most of these guys have more money than they can possibly spend, but are physically unable to do the things they used to. They keep reminding me to 'Do it while you can'.

You may envision paying for more assistance as you get older, but it probably won't be for enjoyable things. A lot of my friends used to golf, but cannot anymore. Sure you could pay someone else to hit the ball, while you sat in the cart, but.....you get the picture.

Also, a lot of these people do not want help navigating through airports and being helped on the plane, with their luggage etc. etc. They are very independent minded and do not enjoy being helped. They have a hard enough time getting to breakfast and deep down inside, they know they should be turning over the car keys.... And then they become further dependent on waiting for taxis or friends or ?

I suggest that you talk to a lot of folks in their 80s and get their perspective. We all have a far rosier picture of our later years than reality. And the message that I get from all of these Octogenarians is to Live life now to the fullest. You know the saying. The Go Go 60s, The Go Slow 70s, The No Go 80s and the No Show 90s.....

Cut-Throat, I am 20-30 years from that point you described above....But you have described my future perfectly.


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Old 04-29-2015, 12:06 PM   #26
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Also, a lot of these people do not want help navigating through airports and being helped on the plane, with their luggage etc. etc. They are very independent minded and do not enjoy being helped. <snip>I suggest that you talk to a lot of folks in their 80s and get their perspective. We all have a far rosier picture of our later years than reality. And the message that I get from all of these Octogenarians is to Live life now to the fullest.
I know what you mean- my parents are in mid-80s and have made it to every .grandchild's wedding and graduation so far but my Mom says that if my nephew in New Orleans gets married there they're unlikely to attend- flying is too much hassle and it's too far to drive.

DH, at 76, is in that middle area where spending some extra bucks does mean the difference between traveling and staying at home. Our trip to Iceland in August includes a couple of nights in Boston beforehand, a nonstop in Business Class to Keflavik and a larger hotel room in the center of town so he's got a nice place to relax while I do some of the more rigorous things. We should also be able to "age in place" if we want to , similar to my parents. They have a simple 3 BR ranch house and Mom still cleans it and they both do yard work, but the heavy stuff is hired out.
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Old 04-29-2015, 01:09 PM   #27
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From the ads we receive (walk-in bathtubs, wrinkle creams, giant underwear, Ambulatory Adult communities, and in poor Mr. A's case, burial services), it's clear that once you turn 50 or 55, companies don't expect you to buy anything interesting or fun. Presumably they've done their market research and are on to something, as regards the general population.

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I get ads for hearing aids at least once a week. Also I get a lot of ads for cremation, insurance policies to cover burial expenses, donations to questionable charities, powerful vision magnifiers, Viagra/Cialis, scooters, and more.

I buy lots of things, but not these. Mostly I buy interesting, fun things. On the other hand, I'm "only" 66, going on 67.

I did purchase motion-detecting nightlights and a few other items to help in fall prevention. I read somewhere (here?) that falls are a major reason for hospitalization of people over 65. I haven't fallen yet at home, but my objective is prevention instead of closing the barn door after the horse has escaped.
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Old 04-29-2015, 01:27 PM   #28
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I see the same pattern in my own parents (in their early and mid 80's). Both have more money than they know what to do with. While they're both still active and healthy, neither have any interest in obtaining gratification through spending. I personally spend less than I did 10 and 20 years ago, and besides travel, I see this pattern continuing. YMMV.
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Old 04-29-2015, 01:40 PM   #29
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I know several people in their 80s. Some of them are finally doing some traveling they put off because they thought they couldn't afford it. I'm glad they figured out they could and are taking some trips. There are a wide range of situations.

I don't personally don't have a problem with hiring assistance or getting max help with transport, luggage, etc. that is not my personality.

I still have the rest of my 50s, 60s, and, 70s to get through first.

But your example has no bearing on my case. I am already doing as much as I can now. I just don't expect or plan for my spending to go down as I age. There are things I don't pay for now that I can easily imagine paying for when I'm older and want more comfort while traveling - more taxis, maybe a cruise or two, flying first or business class. I will probably increase my gifting when I don't spend it on myself.

So for planning purposes I don't assume spending will drop. We have to cover our own long term care and have no pension or other retirement benefits.
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Old 04-29-2015, 01:42 PM   #30
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I personally spend less than I did 10 and 20 years ago, and besides travel, I see this pattern continuing. YMMV.
Oh gosh, not me! I spend substantially more than I did when I first came to the ER Forum about 8 years ago. Back then, I was working so hard, half exhausted, and saving for retirement. But now, I have no need to do that and now I have SS and pension, and all the time in the world to think of fun and interesting ways to spend my money.

I can pretty much guarantee that I will be spending a lot more if/when I am in my 80's than I did in my 50's. YMMV and for some it apparently does!
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Old 04-29-2015, 01:45 PM   #31
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I know several people in their 80s. Some of them are finally doing some traveling they put off because they thought they couldn't afford it. I'm glad they figured out they could and are taking some trips. There are a wide range of situations.

I don't personally don't have a problem with hiring assistance or getting max help with transport, luggage, etc. that is not my personality.
My mother traveled extensively all of her life and up through her 80's, although she quit traveling when she was 89 (she broke her hip not too long after that). In her late 80's she would go with her boyfriend, who was about 5 years younger than her and very physically fit. He would assist her or help to arrange assistance for both of them, when necessary. Like you, she was pretty realistic and didn't mind accepting help when she needed it.
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Old 04-29-2015, 01:46 PM   #32
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I get ads for hearing aids at least once a week. Also I get a lot of ads for cremation, insurance policies to cover burial expenses, donations to questionable charities, powerful vision magnifiers, Viagra/Cialis, scooters, and more.
Yeah, I get some pretty dismal banner ads and DH and I get lots of mailings for hearing aids. Must be a big money-maker. (Thanks to this group, DH got his at Costco and is really happy with them.) The only thing that adds any cheer are the travel-related banner ads.

Last month, OTOH, I spent $750 on a pair of ostrich boots. I'm 62 and I'm sure the marketers didn't see that coming!
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Old 04-29-2015, 02:22 PM   #33
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..
I think I believe some of the older folks reduction in spending is due to no other choice. I.e. they don't have the remaining funds to spend more.
Bernicke thought so too, initially. But after going through the data, he found that spending decreased even for people who had the money to spend more.

For what its worth, we don't "plan" on spending less as we get older, but it is comforting to know that we probably will. Besides, our budget is based on our portfolio value. As we get older, we'll probably increase that percentage since leaving a large inheritance is not in our plans.

I think these studies benefit people who have no choice to keep working longer and have limited resources. Their Financial Planners can use this to allow a little more income now with the possibility of less in the future.
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Old 04-29-2015, 02:24 PM   #34
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I get ads for hearing aids at least once a week. Also I get a lot of ads for cremation, insurance policies to cover burial expenses, donations to questionable charities, powerful vision magnifiers, Viagra/Cialis, scooters, and more.
When we go to visit FiL in a rural part of NH, we see a lot more of these medical ads than we do here in Denver. On the other hand, we skip through ads since we don't watch anything live anymore.
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Old 04-29-2015, 02:29 PM   #35
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I'm skeptical that the population in the studies Cotton uses as a reference are representative of early-retirees (e.g., the high-spend category is defined at 30k and high net worth is 400k including present value of SS/pensions) BUT lets say you believe spending will decrease as you age (once you get to age 60-65 as per the study). What do you plan to do right now? perhaps increase your withdrawals?

For me, the age where spending goes down is far enough away that the uncertainty from portfolio returns totally dwarfs everything else.
I always assume that studies on "retirees" do not include Early Retirees, unless they deal with 40 & 50 year retirement horizons, which very few do.
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Old 04-29-2015, 04:23 PM   #36
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When we go to visit FiL in a rural part of NH, we see a lot more of these medical ads than we do here in Denver. On the other hand, we skip through ads since we don't watch anything live anymore.
Watch anything live? Gosh, I really wasn't talking about that, but more about targeted advertising. For example, I get the ads I mentioned above in the mail. Snail mail. In my mailbox. Often addressed to "Seniors!"

The whole point of my post, and perhaps also the one I was responding to, was the targeted advertising seniors get from Madison Avenue as they try to to focus on things seniors might buy.
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Old 04-29-2015, 04:35 PM   #37
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I think I believe some of the older folks reduction in spending is due to no other choice. I.e. they don't have the remaining funds to spend more.
It's shocking when one reads about how many seniors depend on SS income only during retirement - - especially since the average monthly retirement payout from SS is only $1328/month, and that's before Medicare Parts B, D, etc, are subtracted from it. That's a pretty tough row to hoe.
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Old 04-29-2015, 04:44 PM   #38
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Nor did they foresee me buying a bright-red, sleeveless, Calvin Klein bandage wrap dress, but I did, and now we have to find a suitable restaurant for me to wear it to, along with the high heels bought to go with it

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Y
Last month, OTOH, I spent $750 on a pair of ostrich boots. I'm 62 and I'm sure the marketers didn't see that coming!
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Old 04-29-2015, 04:47 PM   #39
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We are working on spending more now. But I still can't bring myself to buy business class tickets on international flights.

Maybe when we are in our 60s and finances still look good (knock on wood!!!) I'll be willing to spend more that way.
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Old 04-29-2015, 04:49 PM   #40
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Nor did they foresee me buying a bright-red, sleeveless, Calvin Klein bandage wrap dress, but I did, and now we have to find a suitable restaurant for me to wear it to, along with the high heels bought to go with it
Hilarious y'all!!! LOL! Good for you!
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