Retirement Spending Pattern: The Spending Smile Explained

Ross Williams March 23, 2026

Picture this: You've finally retired with a solid nest egg, and your financial advisor — let's call him Chad because of course he's named Chad — confidently tells you to stick to the 4% rule. "Just withdraw $60,000 a year, adjust for inflation, and you'll be fine for 30 years."

Fast forward three years. You've been living it up. Italy with your spouse. Kitchen renovation that somehow turned into a three-month ordeal. Spoiling the grandkids because, well, that's what grandparents do. Your annual spending? A whopping $90,000.

You're panicking, thinking you've already blown your retirement.

But here's the twist: You might actually be on track.

Welcome to the retirement spending smile — one of the most important retirement spending patterns that almost nobody talks about. And it's about to change how you think about every dollar you've saved.

Why Most Retirement Calculators Get Spending Wrong

Most retirement planning tools make this massive assumption that would be hilarious if it wasn't so dangerous: they expect you'll spend exactly the same amount every year of retirement, adjusted only for inflation.

Think about how ridiculous that is for like two seconds.

You really think you'll spend the same amount at 67 as you will at 87? That your healthy, "I'm gonna climb Machu Picchu" 70-year-old self will have identical expenses to your 85-year-old self who needs help opening pickle jars?

The Real Retirement Spending Pattern: Why They Call It a "Smile"

Back in 2013, this researcher named David Blanchett did something revolutionary. Instead of just assuming how retirees spend money (like every other financial expert on LinkedIn), he actually looked at real spending data from thousands of retirees.

What he found? It turned decades of retirement planning wisdom on its head.

Retirement spending doesn't follow a flat line. It follows a smile curve: high at the beginning, low in the middle, high again at the end.

And once you see it, you can't unsee it.

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Go-Go Years (Ages 65-75): How Much You'll Spend in Early Retirement

You've just escaped corporate life. You're healthy, you're energetic, and you have a bucket list longer than the line at Costco on a Saturday. This is when retirement spending typically runs highest.

My buddy Dave retired three years ago and immediately booked a month in Thailand. "Ross," he said, "I've been talking about this trip for twenty years. My knees work now. In ten years? Who knows."

Where does all that money go?

• Travel becomes an obsession. The average retiree spends 50% more on travel in their first five years than they ever did while working. That cruise through the Mediterranean? The RV trip across America? It's happening now, while your body still cooperates and your energy is high.
• Home projects finally get done. You know that bathroom renovation you put off for fifteen years while climbing the corporate ladder? Now you've got time to manage contractors and money to do it right.
• Hobbies get expensive fast. Golf memberships, photography equipment that costs more than your first car, art supplies, woodworking tools — suddenly you're investing in all the stuff you never had time for.
• Your kids need help. Your adult children are in their peak home-buying, family-starting years. That down payment assistance feels natural when you're not stressed about your own paycheck anymore.

Slow-Go Years (Ages 75-85): When Retirement Spending Naturally Decreases

Then around 75, something interesting happens. Retirement spending by age naturally drifts lower in real terms.

It's not that you become cheap overnight. Life just becomes... different.

My neighbor Margaret is 78. She used to travel constantly — Europe, Asia, fancy cruises. Now? "Ross, I'm perfectly happy reading in my garden and having the grandkids over for dinner. I don't need to prove I'm living my best life on Instagram."

• Travel slows down. That three-week European adventure becomes a week-long domestic trip. Road trips replace international flights. Hotel stays get shorter. And you know what? You're okay with that.
• Activities simplify. Instead of expensive hobbies, you're reading more, gardening, spending time with family. Entertainment shifts from concerts and shows to Netflix and home gatherings.
• Transportation costs plummet. You're driving less. Maybe you're down to one car. Public transportation or rides from family become more common.
• Major projects are done. The house is finally how you want it. You're not taking on renovations anymore because, honestly, who has the energy for dealing with contractors at 78?

This isn't decline — it's natural evolution. You've checked off most of your big retirement dreams. You're content with a quieter, less expensive lifestyle. And there's something beautiful about that simplicity.

No-Go Years (Ages 85+): When Healthcare Costs Spike Your Retirement Budget

Then the smile curve kicks up again. Hard.

Healthcare costs start dominating your budget in ways that would shock your 67-year-old self. If long-term care enters the picture, total spending can jump right back to go-go levels, or well past them.

• Medical expenses multiply like rabbits. Average healthcare spending jumps from $6,833 annually in your early 70s to over $11,600 after 85. And that's just the average. Some people hit way higher numbers.
• Long-term care becomes reality. Here's a stat that'll keep you up at night: 70% of people over 65 will need some form of long-term care. Home health aides run about $80,080 a year. A private nursing home room? $129,575 (CareScout, 2025).
• Prescription costs pile up. Multiple medications, specialized treatments, medical equipment — it all adds up faster than you'd think possible.
• Your house needs to work differently. Ramps, stair lifts, bathroom safety equipment, updated lighting. Suddenly your home needs modifications you never saw coming.

This is the part of the retirement spending smile that catches most people completely off guard. They planned for travel and fun in early retirement. They adjusted to lower spending in the middle years. But they never prepared for the healthcare avalanche at the end.

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How the Spending Smile Changes Your Retirement Planning Strategy

Understanding the spending smile isn't just cocktail party trivia — it fundamentally changes how you should think about retirement money.

Why the 4% Rule Doesn't Account for Real Spending Patterns

That standard advice to withdraw 4% of your portfolio annually? It assumes flat spending forever. But if you're gonna spend more early and late, with less in the middle, you need a completely different game plan.

Maybe you withdraw 5% during your go-go years, knowing you'll pull back to 3% during the slow-go phase. Front-load the experiences while reducing later financial stress.

Healthcare Planning for No-Go Years

If massive healthcare costs are coming in your 80s, you can't just hope they'll magically fit into your regular budget. You need a real plan:

• Long-term care insurance while you're still healthy enough to qualify (and before the premiums get insane)
• Health Savings Account maximization if you're still working
• Medicare supplement planning that actually covers the gaps
• Family conversations about care preferences before anyone needs care

Timing Your Retirement Spending Right

The spending smile gives you permission to enjoy early retirement way more than traditional advice suggests. But it also demands you prepare for later challenges.

That European trip you keep putting off until "things settle down"? Take it during your go-go years. Your 78-year-old self might not be interested, and your 88-year-old self definitely won't be physically capable.

Real Example: How the Retirement Spending Smile Plays Out

Let me tell you about my friends Sarah and Tom. They retired three years ago at 65 with $1.2 million saved. Their financial advisor told them to stick to $48,000 annually (good old 4% rule).

Years 1-3: They've averaged $78,000 per year. Two major trips — one to New Zealand, another to Scotland. Kitchen renovation that somehow took six months. Helped their daughter with a down payment. They were worried about overspending.

The reality: They're following the spending smile perfectly. Their travel and home improvement phase will naturally wind down. By 75, they'll probably be spending $45,000-$50,000 annually. But they'll need $65,000-$80,000 in their 80s for healthcare costs.

Instead of panicking, they're now planning for the full smile curve. They're maximizing their active years while preparing for future realities. Smart move.

Why Most Retirement Tools Miss This Pattern

Here's what drives me nuts: most retirement calculators, even the sophisticated ones, completely ignore the spending smile. They're built around flat-spending assumptions because it's easier to program and explain to people.

Even tools like Boldin and ProjectionLab, which offer some customization, default to inflation-adjusted flat spending. They're missing one of the most important patterns in retirement planning.

This is exactly why we built Ready Aim Retire differently. Instead of assuming your spending will be flat forever, we help you model realistic scenarios that match how people actually live in retirement. Revolutionary concept, right?

How to Plan for the Full Retirement Spending Smile

So how do you actually plan for this pattern without losing your mind?

• Start with the scary stuff. Healthcare in the no-go years is the most expensive and least predictable part. Get long-term care insurance quotes now. Understand what Medicare doesn't cover. Budget for prescription costs that could easily hit $500+ monthly.
• Front-load the bucket list. That dream trip? That hobby you've always wanted to try? Schedule it for your late 60s or early 70s. Your energy, health, and interest will peak during these years.
• Build in flexibility. Your withdrawal strategy should bend with the smile curve. Higher early withdrawals, lower middle withdrawals, higher late withdrawals for healthcare. Think dynamic, not static.
• Plan for the sweet spot. Those years from 75-85 might be your most financially comfortable. Lower expenses but still good health. Plan activities that take advantage of this phase without breaking the bank.
• Have the uncomfortable conversations. The no-go years often involve family caregiving decisions. Talk about this stuff early, when everyone can think clearly about preferences and logistics.

The Bottom Line: Your Retirement Spending Won't Be Flat

Retirement isn't a flat line, no matter what Chad the financial advisor tells you. It's a journey with three distinct phases, each with its own personality and price tag.

Go-go years are for experiences and dreams. Spend what you need to live fully.

Slow-go years are for contentment and simplicity. Enjoy lower expenses and peaceful routines.

No-go years are for dignity and care. Plan for healthcare costs that could shock your younger self.

The retirement planning industry keeps selling this fantasy of predictable, flat spending. But the reality is messier and more human: you'll spend like the person you are at each stage of life.

Understanding the spending smile doesn't just make you a better planner. It gives you permission to be human in retirement — to dream big early, find contentment in the middle, and prepare realistically for the challenges ahead.

Your retirement won't look like a flat line. It's going to smile back at you.

Plan accordingly.

Peace!