Your spending won't be a flat line — so stop planning like it will
Almost every retirement calculator assumes you spend the same amount, adjusted for inflation, for thirty years. Nobody does that. Spending is high while you're active, drifts down through your seventies, and often rises again at the very end. Planning for the real shape lets you spend more in the years you'll actually enjoy it.
The shape of your spending
Today's dollars, across the whole retirement.
What the portfolio does
Phase by phase
Overspending risk
Making sense of this one
Retirement spending has a shape, and planning for a flat line quietly costs people the years they saved for.
The three phases
Almost every retirement calculator assumes you spend the same amount, adjusted for inflation, for thirty years. Nobody actually does that. What research consistently finds instead is a curve with a name attached to each part:
- Go-go years — roughly your sixties and early seventies. Travel, the projects you postponed, visiting people. Spending is at its highest, often higher than while you were working.
- Slow-go years — mid-seventies into eighties. Still active, but closer to home. Real spending typically drifts down 1–2% a year without any conscious decision.
- No-go years — spending settles at a lower level, then often rises sharply at the very end if care is needed.
Planning a flat line across all three means either under-spending badly in the years you'd most enjoy the money, or over-spending in a way that only shows up twenty years later.
They have $950,000 and $30,000 of pension income, and they're planning to retire this year. Assuming flat spending for the whole of retirement, they work out they can afford about $78,400 a year and feel slightly disappointed.
Running it as a ramp instead — higher for the first decade, easing back through their seventies, lower after that with a care allowance at the end — the sustainable figure for those first ten years comes out at $87,500.
That's around $9,100 more a year during exactly the decade they're fit enough to use it — funded by the lower spending they were always going to drift into anyway. Same money, better sequencing.
Reading the results
- The green line on the spending chart is what's sustainable. The blue dashed line is what you told it you're planning. If blue sits above green, look at the second chart to see when the money runs out.
- The overspending risk gauge compares the two. Under 35 is comfortable, over 65 means the plan spends materially more than it can support.
- The care years input adds cost at the end. It's easy to leave at zero and get a cheerful answer; leaving it at a realistic figure is more useful.
The most valuable thing you can do
Give yourself a full year before committing to a number. Almost nobody knows what their retirement actually costs until they've lived one — commuting, work clothes and lunches vanish; travel, hobbies and home projects arrive, often more than covering the difference.
Track twelve months of real spending, then come back and replace these assumptions with your own figures. Every number on this page is a guess until you do, and the first year sets a pattern that's surprisingly hard to change later.
General information only — not financial advice. Returns are assumed steady; in reality the order they arrive in matters enormously, particularly in the first decade. Phase percentages are a planning convention, not a forecast of your life. The most useful thing you can do in your first year of retirement is track what you actually spend, then come back and replace these assumptions with your real numbers.