141: Estimating Spending in Retirement Calculations: Front-end the Fun!

"Spreadsheets are great at math; they suck at flexibility." Our hosts, Stephanie McCullough and Kevin Gaines, take aim at the assumption that every retiree spends the same inflation-adjusted dollar amount, every year, until death. It's the number your 401(k) statement spits out, the number the 4% rule promises, and it's wrong in two directions at once! First, it ignores life's lumpiness such as the new roof, the wedding, the pandemic-delayed trip to Greece. These are one-off costs that planners can average into projections but never quite eliminate. Second, and more provocatively, it ignores the "retirement smile". That's spending that's higher in the active go-go years, dips in the slow-go years, then ticks back up in the no-go years as long-term care costs bite. Their fix isn't a better formula but the intentionality to separate true essentials (food, shelter, utilities) from discretionary spending (travel, hobbies), because only the latter can flex when markets fall or inflation bites. Front-load the trips and experiences you're physically able to enjoy now. Retirees should borrow from "future spending" you were always going to do eventually anyway. Take it from Stephanie, who encourages us to "plan that trip, people!"   Key Topics: The Straight-Line Spending Myth (03:16) One-Off Expenses and Life's Lumpiness (05:33) The Retirement Smile: Go-Go, Slow-Go, No-Go (06:45) What the 4% Rule Actually Promises (10:10) Front-Loading the Fun Stuf