Linda Stern: "What all those retirement studies get wrong"

[Katsmeow]

Quote:

Originally Posted by MichaelB 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 don't think the conclusion necessarily follows. That is, it is surely true that for some (maybe even many) their spending falls entirely because of lack of income and not because of any other factor.

On the other hand, there are other possibilities.

For some people, maybe they figure out how much money they believe that they will personally spend in retirement and when they have sufficient assets or pensions or SS or combination thereof to hit that annual income they quit working. I think that is very likely true of many people here. If you think that you can live on $X a year and you have $X a year available, then the ideal would seem to be to retire and hopefully speed something close to 100% of $X each and every year. To continue working until the time you would two times $X in income each year would be working years longer than necessary.

FWIW, the above definitely applies to DH and I. We looked at the numbers and made projections of what we wanted to spend and based on that DH retired and I ESRed. Just didn't see a point to continuing to work to hit higher numbers.

I do believe the general trend of people spending less as they age. Just from what I've seen with my parents and other relatives, they slowed down and spent less as they aged. Not so much at age 65, but surely after age 70. Of course, that general trend is highly influenced by what you want to do during retirement.

We did do a major vacation this year. And, it was nice. But, truthfully, I don't want to do a lot of them. Maybe one more. It isn't, btw, that I want to "hunker down" or want to watch TV all day (I don't even have cable). It is just that most of the things that I enjoy doing don't require me to travel and are just not that expensive to do.

[thoreau]

Rotflmao!!! For the video of Stan Boreson!!

[unclemick]

1993 to 2010, ER age 49 to 68. Ballpark 12k - my personal best all time el cheapo yr in the 90's to 89k a remodeling yr plus new car post Katrina. Handgrenade around 2 to 6% SWR(4% benchmark) depending on my bellybutton indicator.

I suspect most posters to this forum have a range of wiggle room options they can use given they have approached the original question of ER - something a lot of the population has not even considered.

heh heh heh - I noticed my charitable giving has tended to go up with time also. Time in the market has slowly allowed a rise in my 'core expenses' but I can still vary my spending quite a bit.