This article is part of the Biblically-Informed Framework for Retirement Stewardship (BIFRS) series. It was originally published in May of 2023, but was updated in April 2026.
When I first wrote about this topic in 2023, I had been retired for about five years. Now, with eight years of actual retirement experience behind me, I can speak from lived reality rather than just research and projections.
The short answer to “Does retirement cost less as we age?” is: It depends—and the answer is more nuanced than most retirement planning articles acknowledge.
What I’ve learned is that retirement spending doesn’t follow a simple declining trajectory. Instead, it follows what researchers call the “retirement spending smile”—higher in the early “go-go” years (60s and early 70s), lower in the “slow-go” years (mid-70s through early 80s), and potentially higher again in the “no-go” years (late 80s and beyond) when healthcare and long-term care costs can surge.
I’m currently in that first phase, and yes, we’re spending more than we anticipated on travel, home maintenance, and helping family. But I’m also watching friends in their late 70s and 80s whose spending patterns confirm what the research predicts: expenses do moderate in many areas, but healthcare becomes an increasingly large percentage of total spending.
The article below has been updated with 2026 data and current research, but my fundamental conclusion remains: Plan for variability, not steady decline.
There are two prevalent assumptions about the cost of living in retirement. One is that most retirees can live on 70% to 90% of their pre-retirement income. Another is that that percentage will decrease (net of inflation) as we grow older.
Both offer some comfort when considering the cost of a long retirement. And both are true in some respects, but they come with many caveats and important considerations.
When it’s mostly true
First, let’s look at the true parts. Many people entering retirement will start out spending less than they did before retirement IF they have paid off their mortgage, have no child-related expenses, have lower health insurance costs due to Medicare, and are no longer contributing to retirement savings.
If they had high-cost work-related expenses—commuting, clothing, dry cleaning, lunches out, professional dues, supplies—that would further reduce their expenses. For some people, these work-related costs represented 10-15% of their gross income.
Some retirees downsize their homes, eliminating or reducing mortgage expenses and possibly lowering property taxes, insurance, utilities, and maintenance expenses. Others relocate to places with lower costs of living—moving from high-cost coastal areas to the Southeast, Midwest, or Mountain West, for instance. How much a household will save varies significantly based on specific circumstances.
For some retirees, charitable giving may decline when they first retire, perhaps because they tithe a percentage of income (10% of a lower income equals lower giving) or because they’re concerned about running out of money or leaving something for heirs.
Others decide to ramp up their giving significantly.
I’ve written about giving in retirement, and my general take is that generosity should continue. It’s a waste of time to split hairs over what income is “tithable” and what isn’t. Instead, give generously in proportion to whatever God has entrusted to you. Plus, you may be able to become more and more generous as you grow older and realize that you have more resources than you’re likely to need in your lifetime.
This has been our experience. Once we got several years into retirement and realized our financial plan was working, we increased our giving. Using Qualified Charitable Distributions (QCDs) since turning 70½ has made this even easier and more tax-efficient. We’re now giving a higher percentage of our resources than we did during our working years.
When it’s not true
Here’s how the “spending less in retirement” assumption becomes untrue: Many retirees enter retirement with a mortgage and other debt, incur unplanned expenses, or simply spend more on travel, new cars, boats, or home improvements.
According to the Congressional Research Service analysis of Federal Reserve data, debt among senior households (households whose head is 65 years old or older) has increased substantially in recent decades. From 1992 to 2019, the share of senior households with debt increased from 43.0% to 62.1%, and the median amount of debt among older families with debt rose from $7,294 to $34,000 (in 2019 dollars).
More recent data from the Federal Reserve’s Survey of Consumer Finances shows this trend has continued. As of 2025, approximately 65% of households headed by someone 65 or older carry debt. The median debt level for those with debt has risen to approximately $41,000 (in current dollars). Mortgage debt for a household’s primary residence remains the largest type of debt among aged households by total amount, while credit card debt is the most prevalent.
The persistence and growth of retirement debt are concerning because they mean many retirees are spending more, not less, as they carry debt service payments into what should be their lower-expense years.
Another big factor is healthcare expenses
Although retirees may pay lower health insurance premiums once they’re on Medicare than under pre-Medicare private insurance or COBRA, total healthcare spending will likely increase in retirement due to the effects of aging and the accumulation of chronic conditions.
Another reason many new retirees have higher expenses is that they spend significantly more on travel and recreation than they did during their working years. This is the “go-go years” phenomenon—retirees in their 60s and early 70s who are healthy, energetic, and finally have the time to do the traveling and activities they postponed during their careers.
Some retirees in their 50s, 60s, and even 70s are financially supporting elderly parents in their 80s, 90s, or even 100s. They may also be financially helping adult children who struggle with student debt, housing costs, or raising grandchildren.
The “sandwich generation” squeeze has intensified
Adult children are taking longer to achieve financial independence due to housing costs and student loan burdens. Meanwhile, parents are living longer, often requiring financial assistance for healthcare or long-term care. I know multiple retirees who are simultaneously helping aging parents and adult children—sometimes spending $10,000-20,000+ annually on family assistance they never budgeted for.
There’s no reason to assume the situation has improved despite some economic recovery. Inflation from 2021-2024 significantly eroded purchasing power, and many retirees are still adjusting their spending patterns to account for permanently higher costs in food, insurance, and services.
Do expenses decline over time?
There is some truth to the claim that our expenses decline as we age. A study by The Center for Retirement Research at Boston College found that retiree households spend about 0.7 to 0.8 percent less yearly in retirement. In English, that means that after 10 years, expenses will have declined by about 7-8% (not a particularly large amount).
But a key factor often overlooked in these studies is inflation. Even if average annual inflation is relatively low—say, 2.5% annually—that represents a 28% increase in living costs over ten years. Therefore, although retirees may spend nominally less on certain categories, they’re also getting less for their money due to inflation.
More recent research, including studies by David Blanchett and others, has identified what’s called the “retirement spending smile”—a U-shaped spending pattern over retirement:
- Ages 60-75 (Go-Go Years): Higher spending on travel, recreation, dining, and entertainment
- Ages 75-85 (Slow-Go Years): Moderating spending as activity levels decline, travel decreases
- Ages 85+ (No-Go Years): Rising spending again due to healthcare, long-term care, and home services
This pattern is more realistic than assuming a steady decline. Your spending in your early 80s will likely be lower than in your 60s, but if you live into your late 80s and 90s, costs may rise again—potentially dramatically if long-term care needs emerge.
What doesn’t get cheaper?
Healthcare is the main category that doesn’t cost less as we age. While spending on many other things may go down (before inflation), healthcare tends to increase steadily with age.
That said, healthcare isn’t typically a big one-time expense for most people (although it can be for some). The cumulative expenses of Medicare insurance premiums and out-of-pocket costs are incurred over several decades. According to Fidelity’s 2025 Retiree Health Care Cost Estimate, a couple retiring at age 65 can expect to spend approximately $345,000 on healthcare costs throughout retirement. That’s per couple, not per person—but it’s still a substantial amount. This estimate assumes enrollment in Original Medicare (Parts A and B) and Medicare Part D, and includes premiums, copayments, and out-of-pocket costs for medical care and prescription drugs. It does not include long-term care expenses, over-the-counter medications, or dental and vision care.
Medicare premiums are relatively stable and predictable, whereas out-of-pocket expenses are not. My wife and I pay for Medicare Part B, a Medigap supplemental insurance plan (Plan G), a Part D prescription drug plan, and separate dental and vision coverage. Altogether, our total premium costs are roughly comparable to what I was paying before retirement for an employer-sponsored plan (which was not a high-deductible plan).
A study by T. Rowe Price found that Medicare premiums with prescription drug coverage account for between 70% and 81% of annual healthcare costs for most retirees, regardless of their Medicare coverage type. The study pointed out that these premium payments are relatively predictable and can be budgeted monthly. Out-of-pocket expenses, however, can vary significantly from person to person and are therefore more unpredictable.
Budgeting for out-of-pocket expenses is more challenging. T. Rowe Price and others recommend maintaining a “healthcare fund” as a savings account that can be tapped for such costs, much like other sinking funds in your budget. It would therefore need to be replenished periodically.
The big wild card: long-term care
Although some healthcare expenses are relatively unpredictable, long-term care is the real wild card among retirement expenses.
According to the U.S. Department of Health and Human Services, approximately 70% of people turning 65 will need some form of long-term care during their remaining years. This statistic, often used by long-term care insurance providers to promote their policies, encompasses a wide range of scenarios—from minor assistance for a few months that costs several thousand dollars and can be easily covered out of pocket, to potentially catastrophic multi-year care needs costing hundreds of thousands of dollars.
Here are the current costs (as of 2026) for different types of long-term care:
- In-home care (health aide): $75,000+/year for full-time assistance
- Adult day care: $20,000-25,000/year
- Assisted living facility: $60,000/year (national median)
- Memory care (dementia/Alzheimer’s): $75,000-90,000/year
- Skilled nursing facility (private room): $120,000-140,000/year
- Continuing Care Retirement Community (CCRC): $100,000-500,000+ entrance fee, plus monthly fees
These costs vary significantly by region—substantially higher in major metropolitan areas and coastal states, lower in rural areas and the South/Midwest.
As I’ve discussed in articles on long-term care insurance, many retirees can expect no long-term care costs or minimal costs that they can manage from savings. But that leaves a significant percentage—perhaps 20-30%—of retirees facing high, possibly catastrophic long-term care costs.
The math is sobering. If you need assisted living for three years, that’s $180,000. If you develop Alzheimer’s and need memory care for five years, that’s $375,000-450,000. If you need skilled nursing for an extended period, costs can easily exceed $500,000.
Medicare does not cover long-term care. This is one of the most misunderstood aspects of retirement planning. Medicare covers medical care—hospitals, doctors, and rehabilitation after surgery. It does not cover ongoing custodial care—help with bathing, dressing, eating, toileting, and other activities of daily living.
Long-term care insurance is available but expensive, especially if you try to obtain it after retirement or once health issues have developed. Wealthy people can self-insure, meaning they have sufficient assets to cover long-term care expenses from savings. Those with very limited resources may eventually qualify for Medicaid to cover long-term care costs. That leaves a large middle group facing a difficult decision about purchasing long-term care insurance.
The longevity factor
Another crucial unknown factor affecting retirement expenses is life expectancy. A shorter retirement will entail lower total costs, potentially significantly so, compared to a retirement extending into the late 90s or beyond.
Consider the difference: A retiree who passes away at 75 will have had 10 years of retirement expenses. A retiree who lives to 95 will have had 30 years of retirement expenses, three times as long. Even if annual spending moderates in the later years, the cumulative total will be substantially higher.
While studies showing that some expenses tend to decrease as we age might provide some comfort, longevity truly determines whether the total cost of retirement will be manageable or overwhelming.
Given the possibility of very long life combined with catastrophic long-term care costs, retirement expenses can be wildly unpredictable. Part of that risk depends on how you choose to finance retirement. Those who forgo (or cannot afford) long-term care insurance and fund their retirement primarily with a stock-and-bond portfolio will have less control over these tail risks. Those with little or no savings may eventually need to rely on Medicaid. The range of potential outcomes is quite extensive.
Households that insure against long-term care and longevity risk by purchasing long-term care insurance and life annuities will have less money to spend elsewhere, but will avoid the worst-case outcomes and have more predictable expenses. It can be hard to determine if that’s right for you, so consider talking with a fee-only fiduciary financial planner or advisor to get personalized recommendations.
The retirement spending smile in practice
My wife and I are now eight years into retirement, and I would say we are still currently in the “go-go” phase, so the research is accurate in our case. We’ve spent more on travel than we did while working—mainly on national park trips.
But I’m also watching friends transition into the “slow-go” phase. Travel becomes less frequent. Dining out decreases. Entertainment spending drops. Cars are kept longer. Overall discretionary spending moderates noticeably.
And I’ve watched other friends and family members enter the “no-go” phase, where spending rises again—not for fun activities, but for home healthcare aides, medical equipment, assisted living, and, ultimately, memory care or skilled nursing.
The spending smile is real. Plan for it.
Will expenses decline or not?
So, will your total expenses decline as you age?
The honest answer: Maybe, but not as much as you hope, and not in a straight line.
If you follow biblical wisdom of contentment and moderation in all things, most retirees may at least be able to keep their spending relatively constant at most income levels. The key for those with limited savings is to live frugally, be generous with whatever they have, have a heart to serve others, and trust God for ultimate provision.
If you stay healthy and avoid catastrophic long-term care costs, there’s a good chance your expenses will decline modestly during your mid-70s through early 80s. But if you have high healthcare costs and uninsured long-term care needs, expenses can increase dramatically in your late 80s and beyond.
If God has blessed you with a surplus, look for opportunities to “lay up treasure in heaven” (Matthew 6:20). You can use some resources for yourself and your family, but don’t miss the opportunities for gospel-motivated generosity around you, even when economic times are difficult.
Some research shows that retirees rarely run out of money, even when their risk-based investment portfolios perform poorly. That’s because most retirees adjust their spending if they have any flexibility based on portfolio performance and economic conditions. In other words, when times are challenging, the budget tends to be trimmed—and you may be surprised how much just a few minor adjustments in spending can improve your overall cash flow situation.
Viewing your budget and spending as variable rather than entirely fixed is essential, though certain expense components are genuinely fixed (such as insurance premiums, property taxes, and HOA fees). Although certain expenses may naturally decline as we age, there will be times when we must intentionally reduce spending in discretionary areas.
Practical planning implications
Given the variability and unpredictability of retirement expenses, here are some practical steps aligned with the Self-Sustaining Principle:
1. Budget realistically for the “go-go” years. Don’t assume spending will immediately drop by 20-30% in early retirement. Many retirees spend more in their 60s and early 70s than in their late working years.
2. Build a healthcare sinking fund. Set aside funds specifically for healthcare out-of-pocket costs, dental work, vision care, and hearing aids. These expenses are inevitable and can be substantial.
3. Plan for the long-term care risk. Whether through insurance, self-insurance with dedicated assets, or other strategies, have a plan for how you’d pay for extended care needs. Don’t assume it won’t happen to you.
4. Maintain spending flexibility. Keep some expenses variable so you can adjust if markets decline, inflation surges, or unexpected costs arise. Fixed costs should be covered by guaranteed income sources (Social Security, pensions).
5. Monitor and adjust annually. Review your spending patterns each year. Are you on track? Do you need to adjust? Don’t wait until you’re 80 to realize your spending pattern isn’t sustainable.
6. Prioritize generosity while you can. If you’re blessed with adequate resources, increase giving while you’re in the “go-go” years. You may have less flexibility later if health costs surge.
The bottom line
The question “Does retirement cost less as we age?” has a frustratingly complex answer: Sometimes, in some areas, for some people, during some phases of retirement.
More helpful is to recognize that retirement spending follows a U-shaped pattern (the retirement spending smile), with higher costs in early retirement, moderation in the middle years, and potential increases again in late retirement due to healthcare and long-term care.
The Self-Sustaining Principle calls us to plan wisely so we don’t become an unnecessary burden on family, church, or society. That planning requires:
- Realistic budgeting that accounts for spending variability across retirement phases
- Healthcare planning that recognizes costs will rise, not fall, with age
- Long-term care planning that addresses the largest financial risk in retirement
- Spending flexibility that allows adjustment based on circumstances
- Biblical contentment that finds joy in moderation rather than endless consumption
- Strategic generosity that prioritizes kingdom purposes over hoarding
Retirement expenses are unpredictable. Your health trajectory is unknown. Market returns are variable. Longevity is uncertain. But faithful stewardship is always possible, in every season and at every level of resources.
If you stay healthy, there’s a better chance they’ll go down. But unfortunately, if you have high healthcare costs and uninsured long-term care costs, expenses can increase dramatically.
But if God has blessed you with a surplus, look for opportunities to “lay up treasure in heaven.” You can use some for yourself but don’t miss the opportunities for gospel-motivated generosity around you, even when times get hard.
Some research shows that retirees rarely run out of money, even when their risk-based investment portfolios are doing poorly. That’s because most retirees adjust their spending if they have any flexibility based on portfolio performance. In other words, when times are bad, the budget tends to be trimmed—and it may surprise you how much just a few minor adjustments in spending can improve your overall cash flow situation.