Retirement Spending Evolves—Plan for Each Stage
December 11, 2025
Retirement rarely unfolds in a straight line. Over several decades, the way you live—and what you spend—naturally shifts.
The early years may be filled with travel, hobbies, and a busy social calendar. Later on, you may gravitate toward simpler routines and activities that require less physical exertion. These transitions often bring meaningful changes to your spending patterns.
Rather than remaining flat, retirement spending tends to rise and fall over time. A flexible plan can help you adjust as your priorities evolve. The sections below outline three stages many retirees experience, along with strategic planning considerations for each.
Phase 1: The Go-Go Years
What to Expect in the Early Years of Retirement
The initial stage of retirement is often full of momentum. Many retirees finally have time for extended travel, hobbies, family engagements, and activities they postponed while working. Spending often increases simply because life becomes more active and experience-heavy.
How to Build Reliable Income in Early Retirement
Your retirement income may come from Social Security, pensions, annuities, and investment withdrawals. Ensure that predictable sources cover your essential expenses so market volatility doesn’t disrupt your basic needs. Some retirees use a portion of their savings to purchase lifetime income annuities for added stability.
Creating a Sustainable Leisure Spending Plan
A strong spending plan balances enjoyment and preservation. Allocating funds for travel, hobbies, and family support—while tracking withdrawal rates—helps you avoid both overspending and unnecessary constraints. Financial modeling can help you spend confidently in this active period.
Why Growth Investing Still Matters in Retirement
Even after leaving the workforce, your portfolio needs exposure to assets that can outpace inflation. An overly conservative strategy may hamper long-term financial security. Align your investment mix with your risk tolerance while maintaining room for growth.
Planning for Long-Term Care Early
Because Medicare does not cover most long-term care services, explore options early. Consider dedicated long-term care insurance or hybrid life/long-term care products that offer flexibility and potential legacy benefits.
Phase 2: The Slow-Go Years
How Retirement Spending Changes in Your 70s and 80s
By your mid-70s or early 80s, your pace may naturally slow. Travel and large-scale activities may decrease, while routines and proximity to home take center stage. Your spending often shifts alongside your lifestyle.
Managing RMDs for Tax Efficiency
Once required minimum distributions begin, withdrawals from tax-deferred accounts can increase your taxable income. If your RMDs exceed your spending needs, consider reinvestment strategies, charitable giving, or other tax-mitigating options.
Evaluating Housing and Aging-in-Place Options
Whether you stay in your home, downsize, or relocate, this is the period to assess what living arrangement best supports your health and comfort. If you prefer to stay put, plan for renovations that enhance safety and accessibility.
Benefits of Lifetime Gifting for Estate Planning
Gifting assets to heirs during your lifetime may reduce estate taxes and allow you to witness the impact of your generosity. Cash, appreciated securities, real estate shares, or business interests can all be part of a lifetime gifting strategy.
Phase 3: The No-Go Years
Planning for Increased Health Needs in Late Retirement
As you enter your late 80s and beyond, health care often becomes the largest driver of spending. Mobility changes may increase the need for caregivers or supportive living arrangements.
Ensuring Liquidity for Medical and Care Costs
Keep accessible funds available for unexpected medical or personal care expenses. Strategies such as maintaining ample cash reserves or using backed lines of credit can help avoid forced asset sales.
Updating Estate and Health Care Documents
Review and update wills, trusts, powers of attorney, and health care directives to reflect your current wishes. Clear communication with trusted family members or decision-makers is critical.
Passing on More Than Money—Sharing Values and Intentions
A successful legacy plan communicates the meaning behind the assets. Family meetings and side letters can help heirs understand your intentions, reduce confusion, and strengthen multigenerational continuity.
A Flexible Retirement Plan Supports Every Stage
Retirement spans many years, and your financial plan should evolve with you. Anticipating lifestyle changes and spending patterns helps you navigate each stage with confidence. With a roadmap that adapts as life unfolds, you can enjoy retirement more fully while staying prepared for both the expected and the unexpected.
Sources:
https://www.fidelity.com/learning-center/wealth-management-insights/living-in-retirement
Disclosure:
This information is an overview and should not be considered as specific guidance or recommendations for any individual or business.
This material is provided as a courtesy and for educational purposes only.
These are the views of the author, not the named Representative or Advisory Services Network, LLC, and should not be construed as investment advice. Neither the named Representative nor Advisory Services Network, LLC gives tax or legal advice. All information is believed to be from reliable sources; however, we make no representation as to its completeness or accuracy. Please consult your Financial Advisor for further information.