Monday’s Wall Street Journal (March 27, 2006) carried an article titled “What If…?” The theme is the critical role that assumptions play in retirement planning. The article provides much good information, but it is particularly nice to see the research done by on retirement spending patterns get prominent mention:

According to a new study using data from the Bureau of Labor Statistics, many people overestimate the amount of money they will spend in retirement. The study found that retirees’ total spending, after an initial drop from pre-retirement levels, doesn’t rise with inflation – it generally remains steady. That’s because even though inflation pushes prices higher, the elderly tend to consume less as they age.

We believe that the clear pattern of reduced spending in retirement is too often ignored in retirement planning – including reverse mortgage needs assessment. We’ve developed a retirement calculator that allows users to play with different reality retirement assumptions. Hopefully, the WSJ article is indication that the concept is becoming more mainstream.