Retirement Spending Increases and Decreases OverTime

[From Bob's Library]

An important simplifying assumption in William Bengen’s research is that retirees

spend constant inflation-adjusted amounts throughout retirement. This may be at

odds with the spending patterns of many retirees. An exploration of the data

should give us an idea of how people actually change their spending during


A well-known early example of spending changes over time for retirees can be

found in Michael Stein’s 1998 book, The Prosperous Retirement: Guide to the New

Reality. Stein says retirement happens in three phases, popularly known as the

Go-Go, Slow-Go, and No-Go years of retirement.

He found retirement spending to be greatest in the early active phase of

retirement through age seventy-five. In these Go-Go years, discretionary

expenses for things such as travel and restaurants are high, and retirement

spending tends to keep pace with inflation.

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