Age related spending reduction

atush

some costs go up in the mid 70's such as travel insurance, health care/insurance etc

JoeEngland

Linton wrote: »

Should statistics on average expenditure patterns drive ones retirement plans?
To lead a contented life one needs to get used to a particular standard of living where desires and needs match ability to pay for them. If my income was doubled I doubt it would make any difference to my expenditure but life would be difficult if income halved. It therefore could be dangerous to plan on reducing income as one ages. Expenditure may decrease but it should be because ones wants decrease, not through necessity because one has planned for them to do so.

I'm not factoring this into my retirement plans, but if on average spending does decrease after a certain age then it may result in more of a financial buffer in the future.

LHW99

kidmugsy wrote: »

Have a peer at this one.
https://theprogenygroup.com/blog/retirement-planning-u-turn-on-u-shaped-spending/

Interesting that they say “even for the 80+ age group, only a minority (6.4% of households) are putting money towards meeting long-term care needs.”
This is almost exactly what you would expect if you consider anyone having a 1 in 4 chance of needing care, and most households having two older members (I make that 6.25%).
Obviously not all households would end up with both members making it into their 80's and 1in 4 is an approximation, but its an unexpected confirmation.

AndyAdams

I have factored it into my retirement planning. From the experience of elderly realtives and and friends elderly relatives, once you get to 75+ expenditure appears to decrease. I don't see the point in saving up money to be used when I'm in my 80s when I won't need it. Better to enjoy it while younger, live for today and give tomorrow a thought, but, be warned, it may never arrive. I wouldn't want to be the wealthiest person in the graveyard.

BobQ

LHW99 wrote: »

Interesting that they say “even for the 80+ age group, only a minority (6.4% of households) are putting money towards meeting long-term care needs.”
This is almost exactly what you would expect if you consider anyone having a 1 in 4 chance of needing care, and most households having two older members (I make that 6.25%).
Obviously not all households would end up with both members making it into their 80's and 1in 4 is an approximation, but its an unexpected confirmation.

I think that much of the comments here are over-analysing the situation. The situation depends so much on individual attitudes and behaviours.

On this issue I would say that during my life I have saved money because I have a propensity to save. Others have taken the view spend now and worry about the consequences later.

I doubt many people in their older years save for care for the statistical reasons. More likely they take the view if there is not enough money then to hell with it.

Linton

LHW99 wrote: »

Interesting that they say “even for the 80+ age group, only a minority (6.4% of households) are putting money towards meeting long-term care needs.”
This is almost exactly what you would expect if you consider anyone having a 1 in 4 chance of needing care, and most households having two older members (I make that 6.25%).
Obviously not all households would end up with both members making it into their 80's and 1in 4 is an approximation, but its an unexpected confirmation.

If you are 80+ what good would "putting money towards meeting long-term care needs" do? By that age you would either have more than enough money to last you the rest of your days including a significant contribution to care needs or you wouldnt. In the latter situation, the amount of money you could put away would have no practical impact considering the cost of care.

pensionpawn

Indeed, I intend to keep the same level of drawdown until I'm approx 75, where I will reduce it to two thirds and then reduce it again to one third the original level (approx the basic allowance) around 80. My Dad used to say that tomorrow isn't promised and I intend to whittle my pot down to close to zero by mid 80's (where my parents checked out), if I make it that far. Enjoy life whilst you can. Of course you don't have to spend every penny of your draw down and fully intend to save some / help the kids along the way .

michaels

I have mentioned this before but surely most of us would put value on not living out our years in a poor quality care home. And yet we also have no idea whether we will be in such a home for decades (dementia), a couple of year s(average?) or not at all.

Surely insurance should be available to take this risk away so we don't all bank 20 years fees in order to cover worst case. It would seem to make sense to pay a premium of 5 years worth of fees (or whatever covers actuarial risk plus underwriter fees) to cover any period of care need and then budget the remaining assets to cover the rest of longevity 'risk' - again insuring with annuities where necessary.

Nebulous2

michaels wrote: »

Surely insurance should be available to take this risk away so we don't all bank 20 years fees in order to cover worst case. It would seem to make sense to pay a premium of 5 years worth of fees (or whatever covers actuarial risk plus underwriter fees) to cover any period of care need and then budget the remaining assets to cover the rest of longevity 'risk' - again insuring with annuities where necessary.

Insurance was available in the 1990s at least, but very few people bought it. Most people assumed it would never happen to them. They also struggled with the cost - which in my recollection was nothing like 5 years of fees. More like 18 months. There were payment options as well. Lump sum from capital or pay a premium monthly for a number of years.

crv1963

From my observed experience of relatives and currently my mother, I am not convinced that spending drops significantly but changes- paying for house repairs/ decorating/ hedge trimming etc. Also paying for carers to enable themselves to remain in their own home as opposed to going into a care home.


Also pets, quite a number of my relatives most recently my mother seem to collect more pets than they previously had, I've started calling my mother the crazy cat lady after she recently acquired her latest kitten! Insuring pets in addition to feeding them doesn't come cheap!