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It can also be a change in lifestyle that alters spending habits.
Not everyone has expensive hobbies they want to pursue in retirement or see the world or shop til they drop.
sure it can , but my point is there really is no data out there that confirms whether spending drops by choice or whether forced to as we age.
many folks have a fear of running out of money as time goes on as they get older .
others like from my fathers generation grew up as kids in the great depression . they were generally savers more than spenders their entire lives.
as a group that age bracket may just naturally spend less and it has nothing to do with them cutting back as they age. this is the life style they always lived.
I am not saying it is good or bad , I am only saying there other reasons other than growing old that spending in a particular age group shows lower.
you would really have to track the same group from their 60's to 70's to 80's to see spending patterns and so far no one has done that.
My income and expenses went down. My quality of life went up. I wasn't sure where I fit in the poll.
I spend less for necessities (mortgage, taxes, insurance, property maintenance, utilities), mainly because I sold my home and rent. Even though my income is less, a bigger per centage of it is discretionary.
Please, vote in the poll only if you have already retired. That will give us an idea of people's actual experience with expenses, rather than what they are now anticipating in theory.
Not already retired? Posts and comments welcome, but please do not vote.
Great, wonderful topic. I'm disenfranchised from this poll (not retired), but really appreciate reading about the experiences of everybody who has crossed over to the other side.
A few people mentioned health insurance. I can see now that health costs overall are a large wildcard, now more than ever. Without getting into an off-topic diversion, our out-of-pocket health costs are going up by thousands per year. I never anticipated spending $9,000-$12,000 out of pocket, plus premiums--but we are.
I think it primarily about lifestyle so if you change how/what you do the cost will go up or down. We liked the way we have lived for years and did not change much even with a relocation so our expenses did not change substantially. What little we saved from not working we have spent in other ways (healthcare costs for one).
Difficult poll to answer since my expenses went WAY up as I started a $275,000 house remodel - so do I answer my expenses went UP? I think many of us had a choice as to whether our expenses went up or down.
As planned, our post-retirement expenses dropped slightly, but, not much, since we had already reduced our spending to anticipated post-retirement levels, BEFORE we retired!
We did that by paying off our mortgage, increased savings, shifting investments ... and also budgeting for expected post-retirement cost increases (insurance, healthcare, travel, etc).
The entire point was to 'test out' our anticipated post-retirement income and spending patterns BEFORE we retired, ... while we were both still employed and had the option to make adjustments.
The notion of simply 'leaping' into retirement without careful financial planning is either born out of excessive resources, necessity (layoffs, health issues or other unexpected circumstances) -- OR a serious disconnect between reality and imagination.
In our case, the plan is working as 'planned' and we live quite comfortably. We do not expect to significantly 'tap into' IRA's prior to RMD's. --
Can something unexpected 'upset the entire apple cart and plan?' -- Of course, which is why we have set-aside resources for contingencies (LTC insurance, Term Life Backup, future Annuity, etc). We can't anticipate or prevent every possible disaster, but, a little planning goes a long way toward avoiding living 'Retirement in a reactionary-mode.'
sure it can , but my point is there really is no data out there that confirms whether spending drops by choice or whether forced to as we age.
I answered based on what the act of retiring meant to expenses. Aging expenses wouldn't have changed retired or not in my case.
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