This page has a wealth of data and is very recent The 2011 Statistical Abstract: Income, Expenditures, Poverty, & Wealth
Regarding the last 4 posts, The Bernicke model makes no judgement whatsoever as to why spending tends to falls with age. The model just notes the trend. The trend may be best measured by the decade though rather than just over a few years.
For those that keep up your (inflation incremented) spending to maximize your retirement enjoyment, You have my blessings. I too intend to spend the nestegg and don't plan on leaving much.
I feel the same way. Before I retired, we had more time (and energy) to do these things, than money. Now in retirement, we have more money than time (OK, we have the time, but not the energy nor desire) and we have no problem with keeping up our living standards by paying others to do things that we can no longer (or want) to do.Example: DW and I have considered DIY home upkeep an important money saver over the years. We've always taken care of landscaping, decorating, minor remodeling, most repairs, etc., ourselves. No lawn service, no cleaning lady, no painters, few tradesmen, etc. That's starting to change due to both time and diminished physical abilities. And it costs money we didn't have in the budget before.
Just want to say that there is no "correct" spending model for everyone IMO.
If you want to spend more and have the capability to do so, then great. The economy and working people could use the boost too so you are doing good there.
If you don't have the means or are worried about future personal economics and choose the frugal path, that is fine too.
Agree......But I think it is more realistic to assume you'll spend at your original budget level plus inflation.
The observations of spending reductions in retirement are more sophisticated/documented than some of the previous posts allow.
Here's the link to Bernicke's paper: http://www.fpanet.org/journal/articles/2005_Issues/jfp0605-art7.cfm
Some well reasoned anaysis over at the Boggleheads forum: Surveys of retirement spending - Bogleheads
I can't seem to find a link to the pathfinder Tacchino and Saltzman studies on this same topic.
There are also quite a large number of other papers in the financial press on this topic.
MasterBlaster, if you're anxious to stop pulling the plow (I can't remember if you're already FIRE'd or not) and using the Bernicke method allows you to FIRE earlier, go for it. You seem to have a good understanding of what Bernicke is saying and would be unlikely to be disappointed by the results (less real spending through time).
YB: I'm just posting here about patterns. There is no suggestion as to what anyone should or should not do.
My interpretation of that is that everyone needs to make a personal decision as to whether they're going to fit "the pattern" or not. We thought we didn't. And through the first 5+ yrs of RE, that's been correct.
The consumer expenditure survey shows spending declines with age but income does as well, and the % of spending vs after tax income jumps at age 65 to 93% and by age 75 to 100%. In other words, spending falls because income falls. See the data here
I'm retired 4.5 years thus far (as background info). DW (same age) can do the same, whenever she wants to pull the plug (but she's not emotionally ready as yet).Questions (especially for those already FIREd)---
What % of annual spending did you allocate to "discretionary" expenses, and how'd that work for you? What's your actual experience been?
Our discretionary budget is about 33% and if needs be it will be easy to cut back.
The consumer expenditure survey shows spending declines with age but income does as well, and the % of spending vs after tax income jumps at age 65 to 93% and by age 75 to 100%. In other words, spending falls because income falls. See the data here