Maintaining Spending Levels in Retirement
Maintaining spending levels in retirement can be a challenge. A recent study showed that nearly half of retirees were forced to reduce their spending because they didn’t have adequate resources. What are some of the characteristics of those who were forced to cut their spending? We’ll explore that so you can make better decisions about your retirement.
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Maintaining Spending Levels Retirement
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Show Outline
- Intro
- Consumer Financial Protection Bureau Study
- Looked at the ability of retirees to maintain their spending level 5 years into retirement.
- Most retirees see their spending decrease naturally.
- Spend less on things like transportation and clothing
- Do fewer things as you get older
- On average, spending in retirement decreases by 19%
- The Data
- Marital Status
- Age
- When you claim Social Security
- Home ownership and mortgages
- Other debt
- What can you do?
- Benefits of delaying retirement
- Impact on Social Security
- Impact on savings and debt
- Plan to be debt free
- If you have time, save more
- Benefits of delaying retirement
- Outro
Spending in Retirement Decreases...
In general, people tend to spend less in retirement. Many people find they spend less on transportation, clothing, and entertainment. Those who had adequate savings saw their spending level decrease by 19%. But, those who couldn’t maintain their spending level saw their spending drop by 28%.
The Factors in Maintaining Your Spending Level
Marital Status
Married couples are better able to maintain their spending level. Receiving two Social Security payments is a significant factor.
Age
Older retirees had more success than the younger generations. More older retirees received company pension benefits than Baby Boomers.

Social Security
Starting Social Security at younger ages means you receive a smaller benefit. Delaying your retirement improves your benefit, spousal benefits, and survivor benefits. This means you rely less on your savings.
Home Ownership
Home ownership factored into retirees ability to maintain their spending level. Renters struggled compared to those who own their homes.
Mortgage debt also played a role. Those without a mortgage had more success maintaining their spending level in retirement.
Debt
Non-mortgage debt includes things like credit cards, car loans and leases, or other types of loans.
Those who carried debt into retirement struggled more than those who were debt free.
What Can You Do to Plan for A Better Retirement?
1. Consider delaying your retirement
Delaying your retirement can improve your Social Security benefits. It can give you an opportunity to save more and benefit from compounded returns. And it can help you eliminate debt.
2. Create a plan to be debt free
The data shows people who have debt struggle more. Many times, loan payments are your larger expenses. Eliminating those before you retire can reduce the stress on your retirement budget.
3. Save more aggressively
This doesn’t mean use more aggressive investments (though that can help). It means make saving a higher priority, and try to save more.



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About the Author
Neal Watson is a Certified Financial Planner™ Professional and a Financial Advisor with Fleming Watson Financial Advisors. He specializes in helping hard working, middle class families plan for retirement.