Seeking Real Spending Experience 10+ Years After Retirement

[RetiredAt49]

My DW (52) and I (50) just recently retired and seeking real world spending experiences from those of you whom have been retired for at least 10 years and you are 70+ years old now.

Our assumption is that we are going to spend (adjusted for inflation going forward) approximately $150k ($75k is our base and the other $75k is mostly play or lumpy expenses) for the next ~25 years. Our assumption then assumes our spending/expenses will taper and as we approach 80 years old and then flatline somewhere around our baseline of $75k a year.

We currently have no debt, no mortgage, and approx. $4 mil NW excluding our primary home.

Is it safe to assume that your spending drops as you approach 75 years and continues to drop as you hit 80+?

 

[athena53]

Is it safe to assume that your spending drops as you approach 75 years and continues to drop as you hit 80+?

It all depends. I'm 69, retired 8 years ago, but my late husband was 15 years older. I've read that retirement spending follows a U-shaped pattern-higher when you're younger and healthier and want to do more things, slowing down after some point as you become less active and spend more time hanging around the house, increasing as you get to the point that you need LTC or in-home care.

DH and I were avid travelers (and I am typing this from O'Hare after landing here from Munich!) and one thing I noticed as his body began to fail was that he was far more comfortable in Business Class, we needed to get hotels close to public transportation and with enough space for him to hang out while I went out and did more sightseeing, etc. More private cars to/from airports rather than dragging our stuff on and off of public transportation.

This may not apply to you if you're homebodies but I also found that we hired more stuff out. I'm about to throw in the towel and pay someone to mow the lawn. Not sure if anyone can clean the house to my standards, though!

So, I'm at the point where I'm still on the go (Eastern Europe tour scheduled for August) but am paying more for creature comforts. YMMV.

 

[RunningBum]

Take a look at memory care and assisted living costs before you lock in on that. My folks probably never spent more than $50K/yr if you spread out the cost of a couple new cars. I think it dipped for awhile and then went back up close to that when they moved to independent living with activities and all meals included. Then my mother went into memory care and expenses jumped to $120K/yr. Then she had to go to another place that could handle her lack of mobility and they are well over $150K. This is in the midwest, not an HCOL area.

I doubt anyone actively posting now is in that situation, but we don't know that former posters are not.

You can take your chances with a place that takes Medicaid. Some are fine, some definitely not.

 

[COcheesehead]

My Dad lived on virtually nothing up to about 85, social security and small pension, then he almost spent all he had on assisted living. Died with $40,000 to his name at 89.

 

[Fermion]

Neither me or my wife have any interest in LTC so we don't budget for that.

 

[COcheesehead]

Neither me or my wife have any interest in LTC so we don't budget for that.

What if it’s not your choice?

 

[W2R]

Is it safe to assume that your spending drops as you approach 75 years and continues to drop as you hit 80+?

Maybe not?

I'll be 74 in 14 days, and have been retired since 2009. Although perhaps some people here (such as those who enjoy spending on expensive travel) appear to be spending less as they grow older, in my case I don't think that my spending has started to drop so far. I don't enjoy travel.

See below for my annual spending for the past 12 years. Ignore the title: I should have specified the years as 2010-2021, since I just plotted whole years of retirement.

I do expect to continue spending as much, or more, in my late 70's and 80's. But TBH, I really have no idea.

 

[youbet]

Is it safe to assume that your spending drops as you approach 75 years and continues to drop as you hit 80+?

No.

 

[EastWest Gal]

My Dad lived on virtually nothing up to about 85, social security and small pension, then he almost spent all he had on assisted living. Died with $40,000 to his name at 89.

Everyone's experience is different, and more information would be useful.

When did this happen? How long was he in assisted living, and how much was the cost? Did he need nursing home level care before he died? How much did he start with, before ending with $40K?

My experience was very different, due to Dad's assets and my intimate involvement in his care. I saved thousands of dollars with what I did, and it made a more pleasant experience for him. Mom died seven years earlier after 3 months in a nursing home with untreatable cancer.

 

[cyber888]

Neither me or my wife have any interest in LTC so we don't budget for that.

Haha .. we're kinda like you. We're gonna try to still do it all while we're 90

Worst comes to worst, we've got family in the Philippines .. where hired help is cheap. My mom has alzheimers and she lives with a relative in the Philippines and she has 2 maids to take care of her and all. This is the worst case scenario for us.

 

[COcheesehead]

Everyone's experience is different, and more information would be useful.

When did this happen? How long was he in assisted living, and how much was the cost? Did he need nursing home level care before he died? How much did he start with, before ending with $40K?

My experience was very different, due to Dad's assets and my intimate involvement in his care. I saved thousands of dollars with what I did, and it made a more pleasant experience for him. Mom died seven years earlier after 3 months in a nursing home with untreatable cancer.

2009. He was in care for less than two years. He had several hundred thousand in assets, but the costs skyrocketed in the last two years. We sold assets of his to help with the care. He had good insurance, but so much was not covered. The $40k was what was left in his estate to be split among the five kids.

As you said each experience in different, but it would have been impossible for in home care.

 

[Bamaman]

My mother had to have 24/7 "help" watching her for 3 years, and she passed when she was down to her last $5K. She was in a very plush CCRC. It was "her time" at 91 years old.

Our assisted living 1 br. places are $2000-2500 a month. Full nursing home care runs about $7,000 per month. That's far cheaper than most comparable facilities.

We've been retired 14 years, and thankful to live in an ultra low COL place. We continue to have a high standard of living and spend half what #1 is projected on spending. But we have no debt on our two homes.

We too travel overseas 2x in most years. Leaving Wednesday for London and then taking a cruise out of Athens ending in Venice. No business class flights for us, as we're flying for half the normal airfare. And the cruise was originally going to St. Petersburg, but we changed it to the Eastern Med. The cruise was too cheap to turn down.

 

[Teacher Terry]

I have been retired for 10 years. I still enjoy traveling but don’t want to go twice a year like before. My last trip was 3 years ago and I am going to Ireland in June. So my spending is going down as I age.

 

[donheff]

I have been retired for 17 years and will be 74 in August. So far our spending has been right on tract with our expectations. By that I mean that it has been about 20% lower than we budgeted since we included a large fudge factor in the budget. Our travel has not yet decreased (except for Covid). We are leaving for a glamping raft trip through the Grand Canyon shortly and have scheduled a horrendously expensive trip to Antarctica next winter. But I can see a slowdown on the horizon. DW and I are both cycling shorter distances and I have Parkinson's which will eventually slow me down even more. I think by the time I am 80 (DW 76) our travel will be quite a bit less.

We have LTC insurance so, hopefully, not a big unexpected hit there. I saw the comments on "not interested" in LTC but that is easier said than done. Stuff happens. Even if you plan on a "self deliverance" final exit if you develop dementia, for example, it is easy to blow by the window when you are still competent to act on that plan.

 

[Midpack]

Is it safe to assume that your spending drops as you approach 75 years and continues to drop as you hit 80+?

I’ve been retired for 11 years, but you can’t wholesale assume anything. Spending trends through a lifetime, including retirement, are whatever you make them. Some (not all agree) articles suggest a “U” shape in retirement spending, more while your younger and active, less as mobility wanes, and up again as medical/LTC impact many in the last few years. But it’s what you choose, especially someone with a lot of discretionary spending…

Most of us will hit a passive stage, but it will come much sooner or much later for some. You have some influence over when and how severe.

https://www.fidelity.com/viewpoints/retirement/spending-in-retirement

 

[Fermion]

Even if you plan on a "self deliverance" final exit if you develop dementia, for example, it is easy to blow by the window when you are still competent to act on that plan.

The way I see it, if society is going to prevent me from self deliverance, then they have a responsibility to see to my welfare.

 

[eytonxav]

In an inflationary scenario, all bets are off.

 

[TheWizard]

I'm 72, starting my tenth year of retirement.
I also travel a fair amount, back from Oman in February, off to Indonesia in September.

I have no idea what my expenses will be over the next 10-20 years. Probably safest to assume they will increase year after year...

 

[donheff]

The way I see it, if society is going to prevent me from self deliverance, then they have a responsibility to see to my welfare.

Society won't stop you but if you slip into incompetence, or have a sudden change like a stroke rendering you incompetent, you are SOL on your plan. You can't rely upon (or, in my opinion, ask) others to do it for you. The point is that, "The best laid schemes o' mice an' men / Gang aft a-gley.” I am a DIY proponent in this regard but I am preparing supplemental advance directives for dementia to provide some additional guidance if I blow it. But, even if such directives are honored, there could still be a lengthy period of LTC before the avoidance of active measures would apply.

 

[Fermion]

Society won't stop you but if you slip into incompetence, or have a sudden change like a stroke rendering you incompetent, you are SOL on your plan. You can't rely upon (or, in my opinion, ask) others to do it for you. The point is that, "The best laid schemes o' mice an' men / Gang aft a-gley.” I am a DIY proponent in this regard but I am preparing supplemental advance directives for dementia to provide some additional guidance if I blow it. But, even if such directives are honored, there could still be a lengthy period of LTC before the avoidance of active measures would apply.

I have thought about inventing a watch or some other wearable that would inject the user with something if they don't enter a 10 digit code every six months...but then I guess you could forget to put on the watch...