David Blanchett

But like, you know, long story short, the evidence is very, very clear.

that the majority of retirees do not increase their spending every year lockstep with inflation.

And in the new piece, I have all these controls where I look at like who is underfunded, who is overfunded.

And I think there is definitely a component of this, which is circumstances.

Some people have to cut back.

They know they have to cut back.

So I mentioned a minute ago that people when they retire spend about 5% less, right?

OK, like there is a slight reduction in spending, but you might have to spend a ton less because you are like way underfunded.

Right.

And so I think part of it is this fact that people have to spend less because they haven't saved enough.

But if you isolate and look at just households who could spend more, many of them don't, especially as they get older.

Right.

So I think to me, the key here is, is that is that when you run these financial projections and

Considering the possibility or the likelihood of reduced spending can be really important because it can free up money earlier in retirement when you can actually enjoy it, right?

Like there's a really fun kind of model, the go-go, the slow-go, and the no-go years, right?

And I think where that's really neat is just that younger retirees can typically be a lot more active than older retirees.

That's just the nature of things.

And so what I want someone to be able to do is not like underspend like crazy when they're in their 60s and 70s, then have this massive pot of money left in their 80s and they can no longer travel or enjoy it.

And so I think that when you're thinking about how much can I spend each year, like what is my retirement readiness, maybe run a projection where you only increase spending by like 2% less than inflation.

What that'll do probably is free up a lot more money for you earlier in retirement.