Retirement planning often gets reduced to a single number. But that approach can miss how life actually unfolds after work ends.
In this episode of The Retirement Engineer, Jim Kruzan makes the case for viewing retirement as three chapters, each with its own spending patterns, priorities, and planning needs. That shift can help people build a plan that feels more realistic and less stressful.
Why A Flat Retirement Projection Falls Short
Many retirement projections assume spending will move in a straight line over time. Jim explains that this does not match how most people actually live. Early retirement tends to bring more energy, more freedom, and more interest in travel, hobbies, and family experiences. A plan built only around restraint can cause people to hold back during the years when they are most able to enjoy life.
The First Chapter: The Go-Go Years
The early years of retirement are often the most active. This is when people finally have time for the experiences they have postponed for decades. Jim argues that spending can reasonably be higher in this season, as long as it is supported by a thoughtful plan. He also notes that protecting capital matters here because large losses early in retirement can have a lasting effect.
The Second Chapter: A Steadier Rhythm
As retirement moves forward, many people naturally shift into a more routine lifestyle. Travel may become less frequent, and major lifestyle spending often eases. Jim describes this period as one where people are still active and independent, but not spending as aggressively as before. It is also a time when downsizing, home updates, or planning around future care may become part of the conversation.
The Final Chapter: Rising Care Costs
Later retirement can bring a new pattern. Every day spending may decline, but health care, home care, and supportive housing costs can rise quickly. Jim points out that this is where many budgets get stretched, especially if long-term support becomes necessary.
A Better Way To Think About Retirement
Jim describes retirement spending as a smile, with higher spending early on, lower spending in the middle, and an increase later. It is a practical reminder that retirement planning is not just about income. It is about building cash flow for the life you actually expect to live.
Tune in today!
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