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Retirement spending is a U-shaped curve. Here’s how to maximize it

Retirement spending is a U-shaped curve. Here’s how to maximize it

By Kate Ashford | NerdWallet

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Financial planners talk about three phases in retirement: the go-go years, the slow-go years and the no-go years. Expenses tend to be highest at the beginning and end of retirement — creating a U-shape. But many people think of retirement spending as a constant variable.

“As they enter retirement, especially early in retirement, they see themselves spending all sorts of money and then they can’t envision themselves cutting back,” says Jonathan Swanburg, a certified financial planner in Houston.

But the big trips and experiences you’re planning for your golden years are often one-time things, and as you get older, you may naturally travel and spend less. Then at the end of life, there’s an uptick in spending on things like long-term care.

“It kind of looks like a smile when you look at all the numbers,” says Michelle Crumm, a CFP in Ann Arbor, Michigan.

Here’s how to lean into this spending pattern.

Get clear on your goals

A U-shaped retirement plan works for many people — but not all. You and your financial professional should discuss what you hope to get out of your retirement. read more