Three Retirement Cost Considerations That
Most Retirees Don’t Plan For
1. How Do Spending Rates Change During Retirement?
Several studies have examined how retirees’ spending changes over time. The common belief is that expenses naturally decline as activity levels drop—but the reality is more nuanced.
Blanchett’s Retirement Spending Smile
In 2014, David Blanchett found that spending does decrease in the early years of retirement—about 1% per year for the first 20 years—but then rises roughly 2% annually as healthcare and daily care costs grow. Long-term care insurance can help offset these expenses.
Another study from Boston College found that retirees in excellent health with higher wealth see much slower declines—about 0.06% per year.
The takeaway? Retirement spending depends on health, lifestyle, and finances, so planning ahead can provide greater confidence and security.
2. Budget for The 10 Year Storm
You’ve probably heard of a “100-year storm,” but homes have their own “10-year storms.” Some are predictable, like replacing a roof, while others catch you off guard—like when my triple-pane sliding glass door unexpectedly needed full replacement ($10,000!).
Even in retirement, it’s smart to plan for at least one major “storm” every 10 years or less depending on your home’s age. Being prepared protects both your home and your financial security.
“Robots will play an important role in providing physical assistance and even companionship for the elderly. “
-Bill Gates
3. Budget for Advanced Home Technology
Even if you’re retiring today, you may live to see robots helping care for the elderly as home automation advances rapidly.
Currently, most smart devices operate individually, with limited communication. In the next 10 years, homes are likely to be fully networked, with devices coordinating tasks.
Looking 20–25 years ahead—if you’re retiring today, that puts you in your mid-80s—AI-driven technology may anticipate your needs, making daily life safer, easier, and more convenient than we can imagine today.
Advances in home technology—covering safety, healthcare, communication, and robotics—will increasingly allow your home to help take care of you. Some experts even predict that AI could provide companionship.
What Will
This Cost?
Most innovations will likely come as subscription services with little upfront expense. Still, the MIT AgeLab recommends today’s retirees budget about $250,000 (in today’s dollars) over the next 25 years to cover technology costs. It’s a sizable amount, but an investment in staying independent, safe, and connected—you won’t want to be left behind.
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