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Spending Smile - Retirement Spending Pattern Calculator

Would you like to travel more in early retirement and spend less in the later years? Do you anticipate higher healthcare costs in the later years? The Spending Smile allows you to customize your retirement spending pattern to reflect your personal retirement desires and expectations. By default, the calculator uses a standard inflation-adjusted withdrawal plan, and you can specify percentages to adjust the spending pattern. Research by David Blanchett (Morningstar, 2013) found that retirees' real (inflation-adjusted) spending typically dips in early retirement and rises again in the late years, forming a gentle "U-shape" or spending smile. Use the tool below to see how that pattern changes your withdrawal targets.

Early "Go-Go" Years

Higher initial spending gradually tapering as travel and large purchases slow down.

Middle "Slow-Go" Years

Lower, steadier consumption with reduced discretionary spending.

Late "No-Go" Years

Healthcare, assistance, and support costs begin to increase spending again.

Smile Spending - values based upon your specified Retirement Spending.

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Age Smile % CPI Multiplier Nominal w/ Inflation Adjusted Spend Difference ?

Understanding the Spending Pattern Calculator

This calculator demonstrates how the "retirement spending smile" pattern affects your yearly withdrawals:

  • Smile % - Shows the spending level as a percentage relative to your first year (baseline of 100%).
  • CPI Multiplier - The cumulative effect of inflation over time.
  • Nominal w/ Inflation - What your baseline withdrawal would be after inflation.
  • Adjusted Spend - Your actual withdrawal amount adjusted for both inflation and the spending pattern.

By adjusting points on the graph, you can customize your spending pattern to reflect your personal retirement expectations.

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