# When did you notice a significant drop in retirement expenses?



## janus10 (Nov 7, 2013)

daryl Diamond is one author who councils people to anticipate a 10% drop in expenses when you reach your 70's. Obviously that is not a hard and fast rule with no exceptions. Anyone here been retired long enough to see a slowdown in expenses? How long into retirement and/or at what age?

And sorry for implying when you hit 70. I meant that sometime in your 70's it would be a common change in lifestyle to see a drop in expenses.


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## birdman (Feb 12, 2013)

Will turn 70 in a few months and have been retired 14 yrs and have yet to experience a drop in expenses, albeit, they have remained fairly constant. Probably spend 10,000. PA more now than 14 yrs ago - not bad. We travel quite a bit and I play a competitive sport which involves travelling and we still ski, travel, garden, belong to a tennis club, go out with friends, camp, etc and until these things wind down I don't see things changing much.


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## gibor365 (Apr 1, 2011)

> Will turn 70 in a few months


 Good for you! Not many are doing such activities in such age....


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## rikk (May 28, 2012)

I was curious ... this article says ... "But in his (Daryl Diamond) experience with retirees, he’s noticed a tendency for consumption levels to drop off _after age 75_ ... " http://www.canadianbusiness.com/blogs-and-comment/book-review-your-retirement-income-blueprint/ ... as frase says , I don't see things changing much ... going forward near term ... I'm retired, approaching 70. My opinion, if a person has taken the time to establish philosophies over the years (e.g. on spending) that they're happy with, why change ...


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## Eclectic12 (Oct 20, 2010)

If I remember, I'll ask my relatives.

I'd have expected the big expense drop to when retiring (i.e. no longer buying lunches, suits, can travel at off times that are cheaper etc.). Then once things have stablilsed, I am at a loss for why it might drop at 70 the OP mentions or age 75 that the linked book review mentions.

Observing my retired relatives ... this seems more a time of additional expenses due to health issues requiring medicine or therapy.


Cheers


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## kcowan (Jul 1, 2010)

We had the usual savings. Got rid of duplicate credit cards. Cancelled postpaid cell plans. Started buying technology lightly used. Had the time to shop around for bargains. Certain stores have seniors days with 20% off everything. Take public transit more because we have the time. Clothing budget way down.

Entertainment budget up, travel budget up.

Altogether about 20% net savings. Then we bought a snowbird home and spend 6 months there and save a bundle (40% less budget for the year) while travelling to Europe in September each year. So now we can live forever....


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## agent99 (Sep 11, 2013)

We are in mid 70s and have been retired for about 12 years. When working, we were busy at our jobs and did not have time for trips or even to think about home renos, new cars etc. 

Our retirement income including RRIF withdrawals is higher than our income was during last 5 yrs of working. 

Our spending is now as much as we earned just before retirement! We are trying to cut back and to some extent this will happen as we become less active. 

I don't think anyone should count on spending less. You will just spend it on different things.


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## sags (May 15, 2010)

Our expenses dropped off.......but so did our income, so we found it didn't change much.

We eat less but food cost more. We drive less but gas cost more. We never bought a lot of clothes so that didn't change.

We had child expenses for sports.........now we have grandchild expenses for sports.

I know we are paying nothing to CPP, EI, and getting pension credits etc.............so our "taxes" are less, but with our earnings drop it isn't noticeable.

Basically, I think most people spend what is available to them, try to save a little if they can..............and call it life.


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## agent99 (Sep 11, 2013)

sags said:


> Basically, I think most people spend what is available to them, try to save a little if they can..............and call it life.


That no doubt is true! But really, that is just a result. 

For those not yet in retirement, they should perhaps map out and cost the kind of retirement lifestyle they are likely to want. Then consider if and how they can accumulate the retirement savings needed. If the two don't match, then they may have to consider a less expensive lifestyle.


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## gibor365 (Apr 1, 2011)

> cost the kind of retirement lifestyle they are likely to want


If I would mapout cost the kind of retirement lifestyle I want, I'd never retire 



> they may have to consider a less expensive lifestyle


 yes, approprite to the income



> I'd have expected the big expense drop to when retiring (i.e. no longer buying lunches, suits, can travel at off times that are cheaper etc.). Then once things have stablilsed, I am at a loss for why it might drop at 70 the OP mentions or age 75 that the linked book review mentions.


 Looking at my helth trend now (close to 50), I very doubt that I will be travelling a lot at 70 (don't even think about 75) if I still will be around . So, it's very personal....if you are in excellent health , than this is a different story....
And travel oversees , imo, easily takes 20% of the retirement income


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## janus10 (Nov 7, 2013)

rikk said:


> I was curious ... this article says ... "But in his (Daryl Diamond) experience with retirees, he’s noticed a tendency for consumption levels to drop off _after age 75_ ... " http://www.canadianbusiness.com/blogs-and-comment/book-review-your-retirement-income-blueprint/ ... as frase says , I don't see things changing much ... going forward near term ... I'm retired, approaching 70. My opinion, if a person has taken the time to establish philosophies over the years (e.g. on spending) that they're happy with, why change ...


Thanks for coming up with the exact quote. 

I wondered if early retirees might see that drop off somewhat earlier, as in "I've done all the traveling I want to do." Or whatever other activity is a significant expense. My parents have become quite reticent to travel now and that happened before they hit 75.


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## OhGreatGuru (May 24, 2009)

_"But in his experience with retirees, he’s noticed a tendency for consumption levels to drop off after age 7]5 ..."[/I

This statement is ambiguous, and in any case is only one man's personal impression, not a statistically meaningful survey.

This could be chicken-and-egg: maybe consumption drops because income drops?

"Consumption" to me is not the same as "retirement expenses". Maybe necessary expenses go up so you have less to spend on discretionary consumption?

Maybe "consumption" drops because you can't travel anymore because of health or insurance?_


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## gibor365 (Apr 1, 2011)

> Maybe "consumption" drops because you can't travel anymore because of health or insurance?


 This was my understanding and it's make sense....

Also it's likely that in 70-75 you won't be able (because of health reasons) to eat yummy expensive food and will switch to vegatables (I see it with my aunt family)


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## janus10 (Nov 7, 2013)

It's based on US data, and it is about a decade old, but this passes the smell test for me.

http://golio.net/My_Homepage_Files/Download/RealityRetirementPlanning.pdf


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## sags (May 15, 2010)

Given the recent study that revealed an astounding number of retirees were forced to retire earlier than they wanted, there are probably only two main reasons for it happening.

1) Downsized out of their job

2) Health reasons

Whatever the reasons, the likelihood of increasing or even maintaining "consumption" spending is out of reach for those retirees.

It appears that most retirees in the future will have to settle for a less expensive lifestyle than they may have envisioned for themselves.

Carefree days of frolicking on tropical beaches, and travelling the world in style were marketing illusions.

They will have to mimic what grandma and grandpa did..............sit on the porch and be happy they don't have to punch a clock anymore.


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## RBull (Jan 20, 2013)

OhGreatGuru said:


> _"But in his experience with retirees, he’s noticed a tendency for consumption levels to drop off after age 7]5 ..."[/I
> 
> This statement is ambiguous, and in any case is only one man's personal impression, not a statistically meaningful survey.
> 
> ...


_

You're right it is his impression. However it is important to note he has a business that works for and with many retired people. That counts for more than a typical "personal impression". I think there may be something to what he is saying strictly from observing my parents and my parents in law. Both couples traveled a lot in retirement and had good lifestyles but backed travel and total spending way down in their mid 70's due to insurance costs but mostly due to their overall energy and interest levels, not other expenses they had. The extra few k for insurance really wasn't a big deal with their finances, but that generation is really quite frugal and they may almost see it as wasteful even thought they can easily afford it. 
Hard to say whether boomers will approach things the same way._


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## janus10 (Nov 7, 2013)

^^^ that's why I like the study I posted earlier today. As I was reading it, I kept thinking to myself "But, how do you know _this_ isn't the cause?" And then they would provide data which supported a conclusion that, regardless of the particular explanation which would counter their argument, there is a systemic tendency for retirees to voluntarily reduce their spending as they age.

I suspect that the rate of decline could be higher in Canada due to different healthcare costs.


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## OnlyMyOpinion (Sep 1, 2013)

From my perspective, my parents who are in their mid-80's saw their expenses double this year when they finally gave up their house and moved into a retirement apartment. The increased cost was a big surprise, and the change in living was a big adjustment that they have still not fully gotten used to. They are in a relatively 'luxurious' place with meals served in the dining room, and additional medical and care services available if & when they eventually need them. They chose a 2 bedroom of which they use one as a 'tv room', plus there is a 'sitting' room. 
Could they have chosen a smaller, cheaper place somewhere else? Probably, but I think they would have found the adjustment even harder and perhaps felt relegated to the side lines biding until their time is over. 
My point is, don't assume you can project what your retirement will cost, and don't underestimate what it may cost. We are planning what we hope is a large, unnecessary buffer that our estate will eventually get - but only if we haven't used it all ourselves before then


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## marina628 (Dec 14, 2010)

I am with my parents now and they retired 16 years ago and the one expense they have noticed food and utilities prices are eating into their income more than before.They have a beautiful property and lots of land that they want to stay in and thank god are able to right now at 76.Probably home maintenance is the one big wild card that can hit a senior if they choose to remain in their home.


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