Retirement Spending Is Not Flat. How Real World Expenses Change After Age 70

"The 4% rule and most retirement calculators often just assume you are going to spend the same inflation-adjusted amount of money for the next 30 years. On the one hand, this is a simple and clean idea for managing finances, but it's also completely wrong. Real retirement spending rarely works like it's supposed to, and if you are planning on it being static, you're likely setting yourself up for a big surprise."

"A recent report from JPMorgan Asset Management indicates that average retirement spending declines by more than 30% between ages 60 and 85. This isn't a small adjustment to be sure, it's a fundamental shift in how money is moving through your life, at this period in your life. The focus here is now on the fact that this decline isn't even uniform across various expense categories, as some are dropping faster than others, while others are spiking, and timing matters more than most retirees expect."

"Travel, dining out, entertainment, and transportation all start declining as mobility becomes more limited and energy levels drop. Data from the Bureau of Labor Statistics indicate that households aged 75 and older spend roughly $5,091 annually on transportation, compared with $9,321 for those aged 55-64. This is a 50% drop due to the need to commute less, fewer driving responsibilities, and reduced long-distance travel."

Average retirement spending declines by more than 30% between ages 60 and 85. Spending shifts are uneven across categories, with some expenses falling quickly while others rise, and timing of changes matters. After age 70, discretionary spending such as travel, dining, entertainment, and transportation decreases as mobility and energy decline. Transportation spending for households 75 and older falls roughly 50% compared with ages 55–64. Healthcare costs increase substantially in later decades, with annual healthcare spending for older couples rising dramatically after age 75 and especially after age 85. Retirement plans must reflect these changing expense patterns.

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