Early Retirement - Financial Freedom (Investing, Tax Planning, Retirement Strategy, Personal Finance)

Here's How Your Spending Will Change Throughout Retirement (The Retirement Smile)

• Ari Taublieb, CFP®, MBA • Episode 286

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Feeling like “flat” retirement spending plans don’t match real life? You’re not imagining it. Spending typically follows a retirement smile: higher in the early “go-go” years, lower in the “slow-go” years, then rising again later with healthcare needs. In this episode, Ari Taublieb, CFP®, shows how acknowledging that curve can unlock more life early on—without losing long-term security.

Using illustrative scenarios (not recommendations), see how a $2,000,000 portfolio might support higher spending in active years (e.g., ~$110k), step down mid-retirement (e.g., ~$85k), and adjust later (e.g., ~$95k–$105k). A $1,000,000 portfolio might follow a similar pattern (e.g., ~$50k → ~$35k → ~$45k–$50k). The point isn’t precision, it’s aligning your plan with how people actually live.

You’ll learn how to frame spending guardrails, set review checkpoints, and coordinate income sources so your plan adapts as health, markets, and goals change. Ready to stress-test your numbers against reality and retire with more confidence?

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Advisory services are offered through Root Financial Partners, LLC, an SEC-registered investment adviser. This content is intended for informational and educational purposes only and should not be considered personalized investment, tax, or legal advice. Viewing this content does not create an advisory relationship. We do not provide tax preparation or legal services. Always consult an investment, tax or legal professional regarding your specific situation.

The strategies, case studies, and examples discussed may not be suitable for everyone. They are hypothetical and for illustrative and educational purposes only. They do not reflect actual client results and are not guarantees of future performance. All investments involve risk, including the potential loss of principal.

Comments reflect the views of individual users and do not necessarily represent the views of Root Financial. They are not verified, may not be accurate, and should not be considered testimonials or endorsements

Participation in the Retirement Planning Academy or Early Retirement Academy does not create an advisory relationship with Root Financial. These programs are educational in nature and are not a substitute for personalized financial advice. Advisory services are offered only under a written agreement with Root Financial.

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Ari Taublieb, CFP ®, MBA is the Chief Growth Officer of Root Financial Partners and a Fiduciary Financial Planner specializing in helping clients retire early with confidence.


Speaker 1:

The biggest myth in early retirement planning is that you're going to spend the same amount every single year, and that's what most people rely on when they use a software, even the one that I talk about. They'll go ahead and answer a few questions such as when do you want to retire and how much do you want to spend? So if you say you want to retire at 60 and you want to spend 8,000 a month in retirement, it's a good starting spot, but it's not accurate, and the reason for that is you're not going to probably spend 8,000 a month every year. When you retire early, you're probably going to want to spend more than you project because you have your energy and your health, and I want you to be able to spend more because these are the years you should enjoy it. Then what happens is people generally spend a little bit less in their mid seventies, late seventies, early eighties. Then it starts to come up when, all of a sudden, there's more medical expenses or there's giving they want to do so there's a name for this it's called the retirement smile. Where you retire, you spend more with your energy and health. That decreases over time and then comes back up again. I'm going to talk about the retirement smile and give you an example, because this is going to change the way you think about spending throughout retirement. Now you think about spending throughout retirement Now.

Speaker 1:

My name is Ari Taublieb. I'm the Chief Growth Officer here at Root, host of this podcast, the Early Retirement Podcast, and I am a CFP, a Certified Financial Planner, and that is not why you should listen to this podcast or any episode I put out. How many doctors would you never let touch your body? Probably a lot of them. I love doctors because they put my hip together so I can keep playing soccer, and I play soccer about four or five days a week and I love doing it. In the same way, I love making these episodes for you guys. So, yes, there's value to physicians obviously goes without being said, but there's plenty that I would not want to operate on me. Same thing in the financial world. There's plenty of advisors that I would not let manage a dime of my money. There's others that I trust deeply.

Speaker 1:

So I tell you this because I hope you only listen if my style resonates, and it's not for everyone. I obviously I make a lot of jokes, I give examples, I go in tangents. It's just how I do this. I always want your feedback because this is what helps me make the best show possible. So thank you in advance. If you do have any feedback on the content, on my style, delivery, whatever it may be, this is your show. I just get to make it so. With that being said, let's go through an example.

Speaker 1:

So there is a thing literally called the retirement smile, and the retirement smile it's broken down into three phases. So the first phase is what's called the go-go years, so that's ages generally 60 to 70. Assuming you retire at 60, you could use the same framework here if you retire at 50. But this is when you have your energy and your health. You're newly retired, you've got your energy. You want to travel, maybe go out more, do maybe a remodel. You're just trying to enjoy life. So spending will often increase compared to, obviously, a pre-retirement, because why you have the time? That's the biggest shift here. From there we're going to what's called the slow go years, that's mid-retirement, 70 to 80, 85. That's where travel slows down, energy decreases and you're less likely to spend on what we call the extras in retirement.

Speaker 1:

Now a disclaimer here I have clients that share, ari. I know this retirement smile and you like it and you talk about it, but I just think we're going to replace the spending with other stuff, meaning 60 to 70, we're going to travel a ton and enjoy it or spend more on family, and then 70 to 80, that's when we're honestly just going to replace that with helping a kid with a down payment. So we're worried that if you take that out of our plan we're not going to do other things. You can make your plan exactly as you see it In fact you should. But this is the general framework and I'm going over it intentionally because if you do resonate with the episode today and go, wow, that does seem more like me, I'm probably going to go more in alignment with the path of this retirement smile. You might be able to retire earlier or spend more, and I don't want you to be mad at me later in life when you go out why didn't I do some other things?

Speaker 1:

So, going back to this mid-retirement slow-go years, that's where healthcare costs start creeping in, but your total discretionary spending that will decrease and then this is the lowest spending phase of retirement. This is the bottom of that retirement spending smile. So late retirement is what we call your no-go years, that's ages 80 to 90. Now root, which is where I work as the chief growth officer. We didn't invent this. Okay, this is just a framework that is often discussed in retirement planning, so we want to make sure that you understand it and hear it. Now, this is age 80 to 90, your no-go years, where it's discretionary spending, so maybe extra on travel tends to be very low because there's healthcare and long-term care costs that can spike up. So what it creates a spending rise at the end. Now, obviously that depends.

Speaker 1:

Some people pass away very quickly. Some people it's drawn out but think assisted living, in-home care, you don't want to travel so much that you can't afford these things. So I'm going to give you an example. If you have a million dollars, let's say, or if you want to spend $100,000 a year and those are two very different numbers because if you have a million dollars and you want to spend a hundred thousand, yeah, that's probably too much. You're looking at a 10% withdrawal rate there and that is a sure way to run out of money. But many of you want to retire and you have a million dollars and you're like, well, I don't want to spend a hundred thousand a year. So I'm going to give you two examples. That hopefully helps. So let's pretend you have $2 million and you want to take out, let's just say, a hundred thousand dollars a year. Okay, so that's a 5% withdrawal rate.

Speaker 1:

Now, first thing is you want to ask yourself if I take out a hundred thousand, how much am I going to net? Is it all from a Roth IRA? Are you doing what's called tax gain harvesting, where you pay 0% taxes on brokerage account money, or superheroes as I call it? Let's just keep it simple and assume you're not getting to do those things, because most people that come to me it's not all in a Roth IRA, it's in a 401k or IRA. So if that's you and you're pulling from that account and you're pulling 100,000, maybe you're paying 10% in taxes and you're actually netting $90,000.

Speaker 1:

Well, if that's you, you want to make sure that you have money for the rest of your life, and you want to make sure that you have money for the rest of your life and you want to make sure you have a sustainable withdrawal rate. So if you're in that range of 5% or so if you see the other videos I talk about that that would be sustainable, assuming you follow the right path. Well, you could, theoretically, if you aligned yourself with the retirement spending. Smile, instead of withdrawing a hundred thousand, you might want to withdraw something like $110,000 a year. Now you'd go wait a second. That withdrawal rate would put me north of 5%, yes, it would. But that's okay if, one, you're willing to switch your income based off how markets are performing and, two, if you recognize and agree to spending less in the future.

Speaker 1:

So, age 60 to 70, your go-go years. Maybe you're taking $110,000 a year. But age 70 to 80, while your portfolio has hopefully grown, now at this point maybe you're taking $85,000 a year, maybe it hasn't grown to the degree that you expect and your go-go years is cut from 10 years to eight years. Once again, this is not a perfect science, it's just a framework. And then age 80 to 90, maybe you're back up to $95,000 to $105,000 a year. Now it really depends on your legacy goals. If you want to die with zero, we should certainly not do what I just said, because you'll probably, assuming a safe withdrawal rate of 5%, you might pass away with a few million bucks, which might not be your goal at all. Or maybe it is your goal because you have two children, you want to leave this to. So that's if you want to spend $100,000 a year.

Speaker 1:

If we want to say, retire today and you have a million dollar portfolio and you want to go, okay, what would an average retiree spend? What could I actually do? Well, if you don't have social security yet which you wouldn't if you retired at 60 and you had a million dollars if we're going to assume the 4% rule maybe two and a half percent inflation we have to make some assumptions here, which, by the way, you could play around with these in the software that I talk about, you can see 40,000 a year would be the starting spot. So for some of you, you're like, honestly, my home's paid off 40,000 a year. That allows me to do what I want to do. But most of you that reach out to me, you'd like to spend closer to 80 to $120,000 a year. So you could either keep working or you could say you know what I'm going to work part time, or I'm willing to just spend less because I want to be done working. So you could make that decision yourself, but pretend you are the person that goes look, I have a million bucks and I've just had it. I want to be done with work.

Speaker 1:

If that's you, whether you have a million, two, 10, or a hundred million, the logic's the same With the retirement smile, with the go-go years. If you pull 50,000 a year, so that's more than 40,000. I just increased your withdrawal rate for four to 5%, and I'm an advisor. I would do this because I know my client might want to spend more, travel more, enjoy more, but I would want them to understand. Maybe from 70 to 80, instead of a 4% withdrawal rate, we might be at three and a half, aka 35,000 a year, and then it might spike back up again to about 45 to 50,000 a year. So instead of taking that 40,000 and going 40 every single year, you're actually going wider and you're saying, oh, wait a second, why don't I spend more when I have my energy and health?

Speaker 1:

And maybe the one thing you took from this is wow. When I go back to the software and I put 8,000 a month in, I realized that's probably not accurate. I want to put some extra buffer for the beginning. Maybe that's all you take Great. Maybe that's all you take Great. Maybe you go wow. Now that I think about it. I've seen my parents and that's exactly what they did. They spent a good amount, but now they have too much and they're regretting it. So take from what I said the logic and apply it to what you've seen what coworkers you've seen what parents, you've seen friends and go okay, what do I want my retirement to look like? Now, if you want help in retirement so you don't have to be spending your time doing all of these adjustments, that's what we do. This is our work. We do the tax planning, the estate planning, the healthcare, the insurance, the investments, and we love it. So I encourage you to reach out to Root Financial if you're seeking guidance. That's it for this episode. See you guys next time.

Speaker 1:

Thank you all, as always, for listening to the Early Retirement Podcast. I love getting to host these shows and make different content for you guys every single week. I've not missed a single week in years, and that is because I love getting to do this. Now, please be smart about this. Before you actually execute any strategy that you see me talk about or hear me talk about, should I say Please talk to your financial advisor, your tax preparer, your estate attorney. Please be smart about this. None of this should be construed as financial advice. This is for fun, educational, informational purposes only. Once again, just quick disclaimer here. Guys, please be smart about this. Appreciate you listening, as always, and you can, of course, submit a question on my website, earlyretirementpodcastcom, if you, of course, want me to address a specific case study or topic. I will not promise I can get to it, but I respond to every single person and if I find it will be helpful for a lot of people, I will absolutely make an episode on it, at the very least give you some insight. That's it, thanks, guys.