Retirement spending doesn’t stay the same. It often follows a curve, shaped like a smile. Experts call this the “retirement smile” strategy.
In the early years, retirees usually spend more. Travel, dining out, and new hobbies push costs up. Then spending slows during the mid-years, when people stay home more and travel less. Later, in the final stage, health care expenses rise again-making costs climb.
According to a Financial Times analysis, the retirement smile reflects these three phases. It shows why steady savings and flexible planning are key.
For many Americans, this idea helps explain why retirement can feel uneven. Some years are joyful and full of activity. Others are quiet, with fewer expenses. But the end years often demand the most, especially with medical bills and long-term care.
Financial planners say mapping out these stages can prevent surprises. Instead of saving for a flat spending level, retirees can adjust for higher costs at the start and end. A Kiplinger guide suggests using a mix of 401(k)s, annuities, and health savings accounts to smooth out the curve.
How to Plan a Retirement Smile
- Front-load joy: Budget extra for travel or big activities in the first decade.
- Expect calm: Plan for lower daily costs during the middle years.
- Save for care: Build reserves for health and elder care in later years.
- Use flexible accounts: Combine long-term savings with accessible funds.
- Review often: Adjust plans every few years as life changes.
Conclusion: Retirement is not one flat line. It’s a smile-high, low, then high again. By planning for that curve, the “third quarter” of life can truly shine.
