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Susan Talton

Susan Talton

Susan, a Client Advisor at Laird Norton Wealth Management, has more than 25 years of experience in wealth planning. She leads LNMW's Retirement Life Planning Group and is especially adept at working with clients undergoing life transitions.

Retirement Spending: Expect Volatility!



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Life changes come with financial turbulence, what we call money in motion. And retirement is at the top of the list. In fact, a recent survey indicates that spending during the first three years of retirement is way more volatile than many people realize. On average, there is a 20% change — either up or down — from what was being spent before retirement. That is quite a large variance.

For more details, click on the chart on the left. It was created by JP Morgan Chase, based on client spending — use of credit/debit cards, ATM withdrawals and check-writing — from 2012 to 2016. More than half — 56% — of retirees ages 60 to 69 experienced a change in spending during the first three years of retirement, with just 22% being “Steady Eddies.”

Spending volatility — big variations in amount spent — is a major reason we work with our clients, often starting in their mid-50s, to map out a spending plan that is reasonable and sustainable beginning Day 1 of Retirement. We know needs and wants will change, but it is better to have a plan in place rather than being on autopilot during major life transitions. Underlying the work we do is spending sustainability analysis, which acts as a financial compass, pointed toward the life you want. When you veer off course, you can know by how much and how to get back on track.

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