_{Graphic Source: https://phys.org/news/2022-12-americans-decline-age.html retrieved 2022.12.15}

According to recent research by the RAND Corporation, retiree spending declines over time. To many this seems counterintuitive given that as we age, increasing health concerns and associated costs generally rise.  One explanation is known as the "Retirement Spending Smile." This graph visually explains the “Retirement Spending Smile” where retirement is broken out into three tranches. During the “go-go” years, early retirees might actually spend more early in retirement than they were earning their last few years of employment; doing all those things they didn’t have time or money to do while employed Following the “go-go” years are the “slow-go” years where folks tend to spend more time close to home and perhaps medical challenges rear their heads. The final third of retirement is known as the “no-go” years where retirees may find themselves impacted by cognitive and physical decline; reducing spending in many budgetary areas sometimes made up by increased health care costs.

This graph visually explains the “Retirement Spending Smile” where retirement is broken out into three tranches. During the “go-go” years, early retirees might actually spend more early in retirement than they were earning their last few years of employment; doing all those things they didn’t have time or money to do while employed Following the “go-go” years are the “slow-go” years where folks tend to spend more time close to home and perhaps medical challenges rear their heads. The final third of retirement is known as the “no-go” years where retirees may find themselves impacted by cognitive and physical decline; reducing spending in many budgetary areas sometimes made up by increased health care costs.

This information is useful background information in developing a retirement plan, but needs to be taken in context of the clients' values, goals, wishes, activities in addition to their risk tolerance, net worth and asset allocation.