REAL withdrawal in retirement

[kenpoed]

I would like to retire at 60, maybe earlier and use Firecalc to assume a lifespan of 90 (just to be safe), but I have to believe one spends far less in years after say, 70, or 75 than they plan to use.

If I were to plan for $100k income annually in retirement, my guess is in todays dollars I am very likely to spend far less in later years as my desire (or ability) to travel and eat out (for example) declines with age.

Is anyone IN retirement that can speak to the REALITY of their withdrawal rates in later years? Has your spending decreased, therefore needing less annually to be comfortable?

 

[TheWizard]

Or maybe one's "fun" expeditures taper down with age beyond some point, but medical expenditures and inflation balance them out so there's no net reduction in spending?

 

[kenpoed]

Ah yes, medical! I anticipate that will go up quite bit!

 

[Independent]

I like the three phase retirement concept, which leads to a U-shaped pattern:

Active - I get to do those things I couldn't do when I was working.
Passive - I am content to hang around home and tend the garden (or post on the internet).
Dependent - I need someone else to take care of me.

Some people don't spend much money in the Active phase. Maybe they don't have the money, maybe the things they want to do (say local volunteering, babysitting the grandkids) don't cost much money.

Some people don't spend time in the Dependent phase, they go from good health to dead in short order.

But, we should think about all three phases when we're planning.

Of course, unplanned events can take over. We've had a couple of those and we're doing far less traveling and still spending a good deal of money in what should be the Active phase.

 

[Midpack]

I like the three phase retirement concept, which leads to a U-shaped pattern:

Active - I get to do those things I couldn't do when I was working.
Passive - I am content to hang around home and tend the garden (or post on the internet).
Dependent - I need someone else to take care of me.

Some people don't spend much money in the Active phase. Maybe they don't have the money, maybe the things they want to do (say local volunteering, babysitting the grandkids) don't cost much money.

Some people don't spend time in the Dependent phase, they go from good health to dead in short order.

But, we should think about all three phases when we're planning.

Of course, unplanned events can take over. We've had a couple of those and we're doing far less traveling and still spending a good deal of money in what should be the Active phase.

A good insight, I suspect it's the path that many actually end up on despite their plans. Thanks!

 

[MichaelB]

A good insight, I suspect it's the path that many actually end up on despite their plans. Thanks!

+1

My experience with people in the "dependent" phase is it can be very expensive, and here money makes a big difference in quality of life. It is well worth saving for IMHO.