A researcher at Morningstar recently received an award for an article that appears to be consistent with what I’ve been writing for years. Most retirement plans forecast spending incorrectly. They take a starting spending level that usually is an arbitrary percentage of pre-retirement income. Then they assume the spending increases each year at the same rate as the Consumer Price Index. But studies done regularly by the Department of Labor clearly show that retired Americans don’t spend that way. They spend at a steady rate for the first years of retirement, then spending declines. In the later years of retirement, spending might decline further, or it might rise sharply as higher medical expenses and personal care are incurred. You can read the full article at the link.