New retirees sometimes worry that they are spending too much, too soon. Should they scale back? Are they at risk of outliving their money?

This concern is legitimate. Rates of spending are not uniform throughout retirement.

1. The initial stage of retirement can be expensive. New retirees are eager to execute the plans they’ve made. As they travel, make purchases, and enjoy their new life, spending peaks.
2. Retirees in their sixties should realize that their spending will likely decline as they age.
3. When retirees are well into their seventies, spending decreases further. In fact, Government Accountability Office data shows that people age 75–79 spend 41% less on average than people in their peak spending years (usually in the late 40s).
4. Spending lowers even furthers as retirees enter their eighties. Once many retirees are into their eighties, they have traveled and pursued their goals to a great degree. Spending time with grandkids, rather than spending money, becomes the focus.
5. One study finds that medical costs burden retirees mostly at the end of life. BlackRock’s 2017 study on retiree spending patterns found medical expenses only spiked for most retirees in the last two years of their lives. 

The Wealth Management Advisors at Kirtland Financial Services can help you plan for these shifts in spending while you’re building your retirement plan.