More studies: Spending declines with age

[athena53]

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.

 

[W2R]

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.

Amethyst

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.

 

[Options]

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.

 

[audreyh1]

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.

 

[W2R]

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!

 

[W2R]

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.

 

[athena53]

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!

 

[walkinwood]

..
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.

 

[walkinwood]

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.

 

[walkinwood]

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.

 

[W2R]

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.

 

[W2R]

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.
Social Security Press Office: 2015 Social Security Changes

 

[Amethyst]

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

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!

 

[audreyh1]

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.

 

[audreyh1]

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!

 

[W2R]

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

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!

Woo hoo!!! Amethyst, you and Athena53 will both be going out in style!

 

[Amethyst]

And on the same note:

https://www.facebook.com/WOMENSRIGHTSNEWS/videos/915652765143787/?pnref=story

 

[walkinwood]

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.

Business class travel is the one luxury that we wish we could afford. We'll revisit later in life too. Now, we're rather go on a second trip with the money not spent on the upgrade.

 

[Dog]

My dad passed away at 78, but he retired in his 50's and had time to hunt, fish and travel. He took great pride and worked his garden in the later years. My mom passed away at 81 (7 years after Dad) and spent the last six years in assisted living. SS and partial payment from dad's pension paid for most expenses. Her nest egg was proceeds from selling their home. Mom continued to travel until the last 2 years when serious health problems prevented anything more than a lunch date.
My in-laws are early 80's and having health issues and seeing many of their friends pass away. They are homebodies and don't spend much at all except maybe an inexpensive lunch or dinner out. Same with the aunts and uncles in both our families. It seems that their best days in retirement were in their 60's up to early 70's. Then health issues either prevent or discourage activities or opportunities to spend. However, my mom did like to spend money on clothes...especially shoes, but her shopping was done online.
My in-laws do not want to hire help - DH ends up spending his days off doing maintenance on their home. So, I doubt they spend much at all except for possibly medical.
My take-away form observing my family and in-laws is to enjoy the active retirement years while young (60's and 70's) and simplify living arrangements for the latter years.

 

[audreyh1]

Business class travel is the one luxury that we wish we could afford. We'll revisit later in life too. Now, we're rather go on a second trip with the money not spent on the upgrade.

That's our problem too. I can't help but compare the extra cost with how many more weeks in Europe would be funded!

I actually checked the price of our tickets in business class yesterday, and it was $11K more! I did buy our economy+ tickets a month ago, so it's not a completely fair comparison.

 

[athena53]

I actually checked the price of our tickets in business class yesterday, and it was $11K more! I did buy our economy+ tickets a month ago, so it's not a completely fair comparison.

It fluctuates a lot. I remember RT Business Class fares to Europe were around $2,500 in late 2012. I suspect they charge what the traffic will bear and people are going to Europe to take advantage of the strong dollar.

We're paying $4,200 for 2 Business Class fares from Boston to Iceland in August. I've since discovered that they have plenty of flights to Europe (Glasgow is another 4 hours) so we may do a future trip with a few nights' stopover in Iceland. We LOVE Scotland and this is one way to get there without going near Heathrow. Win-Win!

 

[doneat54]

My wife and I have been to Hawaii twice on first class tickets, I've been to Europe twice first class, and this June we are celebrating our 25th and going on a 5 country, 15 day trip.... first class on Virgin Atlantic. And every one of those tickets have been free (some taxes and fees though).

We play the Amex and frequent flier game hard. We buy groceries, gas, lunches at work, and every single thing that we can with Amex. I also have a Chase VISA card with reward points that I use anywhere that I can't use Amex.

We never carry a balance month to month on any card that we have.

So few people (fiscally conservative and disciplined people) really milk the credit card industry well. We are not the customer they want. I'll take the card with the best perks even if it has a 21% interest rate because I don't pay interest.

 

[audreyh1]

My wife and I have been to Hawaii twice on first class tickets, I've been to Europe twice first class, and this June we are celebrating our 25th and going on a 5 country, 15 day trip.... first class on Virgin Atlantic. And every one of those tickets have been free (some taxes and fees though).

We play the Amex and frequent flier game hard. We buy groceries, gas, lunches at work, and every single thing that we can with Amex. I also have a Chase VISA card with reward points that I use anywhere that I can't use Amex.

We never carry a balance month to month on any card that we have.

So few people (fiscally conservative and disciplined people) really milk the credit card industry well. We are not the customer they want. I'll take the card with the best perks even if it has a 21% interest rate because I don't pay interest.

We take advantage of rewards on credit cards too. But I prefer them in cash rebates or credit rather than miles.

 

[hnzw_rui]

My wife and I have been to Hawaii twice on first class tickets, I've been to Europe twice first class, and this June we are celebrating our 25th and going on a 5 country, 15 day trip.... first class on Virgin Atlantic. And every one of those tickets have been free (some taxes and fees though).

We play the Amex and frequent flier game hard. We buy groceries, gas, lunches at work, and every single thing that we can with Amex. I also have a Chase VISA card with reward points that I use anywhere that I can't use Amex.

We never carry a balance month to month on any card that we have.

So few people (fiscally conservative and disciplined people) really milk the credit card industry well. We are not the customer they want. I'll take the card with the best perks even if it has a 21% interest rate because I don't pay interest.

While we do use our rewards credit card for nearly all purchases (basically any place that accepts credit cards that don't charge transaction fees or treat it as cash advance), we just don't spend enough in a year to earn first class or even business class tickets/upgrades. Maybe if we can charge rent to the credit card.

 

[haha]

Since retiring, staying off ladders higher than can reach my interior light bulbs is one of the cheapest insurance policies I have "purchased". So many other potential things can get me, no reason to add a needless one. The energy and strength are still there....the flexibility and agility, however, have been replaced with stiffness.


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This is so true. One of the guaranteed life shorteners (statistically) is ladders. More generally it is being macho. A guy who cleans his own gutters so he can afford to go to Italy has a problem.

Ha