Retirement spending

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This article is the entry point for the topic Retirement spending. Its purpose is to provide a high level summary of the information contained in the associated articles.


Many studies on retirement spending start with an assumed total savings at retirement and then estimate the spending that might be allowable each year afterwards. Such studies are often especially concerned with estimating the maximum spending that won’t lead to premature depletion of personal savings, known as the safe withdrawal rate. These models treat the Total Savings at Retirement as the key independent variable. The spending for each year in retirement is adjusted so that the savings last as long as planned.

This article series takes the opposite approach. Retirement Spending is being treated here as the key independent variable. The future retiree first develops an estimate of their desired spending in retirement. Next the planning process incorporates assumptions about longevity, inflation, and investment returns. Finally, an estimate is obtained for the total savings at retirement necessary to sustain the desired retirement spending rate.

Retirement spending

In some cases, there is a need to explore the types and amounts of spending that can be expected in retirement. The following articles are good starting points for further reading:

Article: Inflation and retirement spending

An in-depth review of how price inflation is incorporated into retirement planning.

Article: Surveys of retirement spending

Discusses the recent results from the two main spending surveys conducted within the U.S.: The Bureau of Labor Statistics' Consumer Expenditure Survey and the Health and Retirement Study. Includes tables with examples of retirement spending of average households across a range of income and marital status.

Article: Medical spending in retirement

Describes the impact medical spending could have on your retirement and how to incorporate it into your retirement planning.

Article: Retirement risk

Reviews the types of financial and health risks faced by a retiree that might unexpectedly deplete their savings. Presents ways of incorporating these risks as optional spending in a retirement plan.


In order to estimate a total savings target at retirement, it is first necessary to supply information about the anticipated spending in retirement. The following articles explain various approaches used to mathematically model (provide a simplified representation of) retirement spending.

Article: Introduction to retirement spending models

This article provides a broad overview of the types of spending models that are currently used for retirement planning. Ranging from simple to complex, an overview of each model's relative strengths and weaknesses is presented. This article provides the background necessary for the subsequent articles.

Article: Replacement rate models of retirement spending

An in-depth review of the replacement rate approach to modeling retirement spending.

Article: Budget models of retirement spending

An in-depth review of the budget (or expense) approach to modeling retirement spending.

Article: Models of spending as retirement progresses

An in-depth review of the models used to describe how retiree spending changes from retirement until death.

Article: Retirement calculators and spending

This article categorizes numerous retirement calculators by the type(s) of retirement spending models they use.

See also

External links