Lifestyle considerations are the next key takeaway as we think about the conclusions that we can use to inform starting safe withdrawal rates. So, this is what’s been called the retirement spending smile. This is a piece of research that my former colleague David Blanchett produced that examined the trajectory of actual retirement spending over people’s retirement time horizons. And what the research concluded is that in contrast with that base case that I mentioned we use when we’re thinking about starting safe withdrawal rates, when we look at actual retiree spending, we see that spending starts higher and that often coincides with people’s good health years, where there’s pent-up demand perhaps to do travel, and then we see that spending tend to decline in the middle to late retirement years, and then it often elevates later in retirement, often in keeping with uninsured healthcare expenses, uninsured long-term-care expenses, higher prescription drug costs, and so on. This is, I think, in a lot of ways a statement that that base case that we use is a little bit of a straw man because it doesn’t depict how retirees actually spend. I mentioned much of the research assumes that fixed real expenditure pattern, but we see when we look at the data, when we look at David Blanchett’s data, we see that decline throughout the middle to later years of retirement.
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