Time and its Impact on Retirement Spending

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Whether your spending pattern will follow a U-shaped graph or gradually decline, the key is to have a carefully devised financial plan. New retirees sometimes worry that they are spending too much, too soon. Should they scale back? Are they at risk of outliving their money? These concerns may be legitimate. Some households “live it up” and spend more than they anticipate as retirement starts to unfold. In 10 or 20 years, though, they may not spend nearly as much. Retirees’ spending habits change over the course of their retirement.

Read on for statistics, common patterns, and advice for having a carefully devised financial plan. 

By the Numbers

The initial stage of retirement can be expensive. The Bureau of Labor Statistics figures show average spending of
$70,570 per year for households headed by pre-retirees, Americans aged 55-64. That figure drops to $52,141 for households headed by people aged 65 and older. For people aged 75 and older, the number drops even further to $45,820.¹

Spending Patterns

Some suggest that retirement spending is best depicted by a U-shaped graph – it rises, then falls, then increases quickly due to medical expenses. However, a study by the investment firm BlackRock found that retiree spending declined very slightly over time. Also, medical expenses only spiked for a small percentage of retirees in the last two years of their lives.²

Have a Plan

So, what’s the best course for you? As you enter retirement, ultimately, your spending patterns will depend on 
your personal choices. A carefully designed strategy, devised with your trusted financial professional(s), can help  you be prepared and enjoy your retirement years.

Contact your RPA Financial Advisor to begin building your retirement portfolio for financial stability throughout your retirement. Follow RPA on LinkedIn and Facebook to stay up-to-date on retirement solutions for public sector employees.

Matthew Martin, CFP®, Certified Financial Planner


1. Bureau of Labor Statistics, 2020
2. BlackRock.com, 2023 (based on a 2017 landmark study that looked at retirement spending.)

The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG Suite is not affiliated with the named broker-dealer, state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security. Copyright FMG Suite.

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