Retirement Spending Is Not a Straight Line

[pb4uski]

Interesting thread. From what I have observed of my parent's generation, spending early in retirement is higher because of travel and higher level of activity and then trends down as one ages but is still capable but less active and then increases when one becomes less capable of taking care of themselves and have to rely more on hired help or assisted living or ultimately a nursing home. Mom is currently in that middle stage but clearly will need more assists in the near future.

While I'm not planning on reduced spending in that middle state I think it is likely.

[REWahoo]

Based on my (admittedly limited) observations, my own experience and personal opinion, most of us who retire with reasonable assets will see a U-shaped spending trend. Barring sudden death, that seems the most likely pattern and eight years into our retirement, we seem to be on that path.

[Corporateburnout]

Quote:

Originally Posted by W2R He sounds pretty wise! I like his advice. It's hard for me to imagine retiring in a big house with stairs. That must be quite a burden. I suppose that if I was in a house like that, I'd stay on the first floor almost all the time and get one of those stair lift chairs to use when I absolutely had to go upstairs. In a sense, I guess I was lucky. I divorced at 50, never a pleasant process, but the silver lining is that by the time I could afford to buy a house I was already 54. Consequently my house is reasonably practical for my old age.

3 years ago we sold our 2500 square foot home with the large yard and the in-ground swimming pool and moved to a similar size townhouse with a first floor bedroom and a full bathroom currently used for guests that could become our master bedroom when we no longer willing or able to climb stairs. When we get to that point we will install a chair lift for the occasional second floor visit.

[Katsmeow]

Quote:

Originally Posted by mathjak107 it is the age old sill un-answered question about senior spending. don't think for one second that seniors won't be able to spend or want to spend that extra million you hand them. they will all spend it very easily.

I think you are overstating the case considerably. I've known several people (my family and DH's family) in very old age who didn't spend anywhere near as much money as they could have safely spent. They just didn't have the desire to do so. My own mother has turned down going out or going on trips (that we would pay for) simply because she finds it tiring to go out (she is almost 90). My aunt and uncle spent very frugally in old age even though they had the money to easily spend more.

I'm sure there are people who would easily spend more if they had an extra million (I probably would myself), but I don't think the evidence should that "all" would do so or that the only reason anyone decreases spending in old age is lack of money. While I have no doubt that is true for some, I don't think there is any evidence that that is the sole reason for everyone.

[pb4uski]

+1 My mother could spend 4x what she does but has no such inclination. In fact, we have to bug her a bit to spend money on things she should (new roof, windows, etc) because she typically views the status quo as "good enough". I've managed her substantial investment portfolio since my Dad died and she never even asks about it. Grandmother was the same - lived on SS and still put money in the bank after giving away over $100k to her 4 children. There comes a time that you are just "putting in laps".

[Moemg]

My Mom is 97 and her spending is probably the same but instead of spending it on vacations she spends it on an independent living apartment . If she suddenly got a windfall she probably would not do anything different . There comes an age where just living a quiet life is enough .

[youbet]

Quote:

Originally Posted by Moemg My Mom is 97 and her spending is probably the same but instead of spending it on vacations she spends it on an independent living apartment . If she suddenly got a windfall she probably would not do anything different . There comes an age where just living a quiet life is enough .

Sometimes it costs money to "live a quiet life." Literally.

We've had DW's mom in a NH for several months now. She'll be private pay for a few months and then switch to Medicaid. She'd LOVE to have a private room because she loves quiet and privacy. Being in control of her own environment is very, very important to her. But she can't afford it. The home we managed to get her into, despite her meager financial status, is quite nice vs. the many others we toured. Still, with a roommate, MIL is unhappy. Stoic, by unhappy.

In her case, there was never an opportunity to decide "spend now or spend later," so the question is moot. She was always in a low income situation.

DW and I do have choices. We're doing fine today using a spend rate based on constant, inflation adjusted spending. I suppose it would be nice to switch to the Bernacke plan and add some thousands of dollars to our annual budget for extra travel or entertainment. Then we think of MIL and decide we'll leave things as they are........ One of us might prefer to have a private room too.