Why spending isn’t a flat line
Almost every retirement plan starts with one quiet assumption: that you’ll spend the same amount, year after year, for thirty years. The 4% rule says it out loud — take 4% of your portfolio in year one, then give yourself a raise for inflation every year after. The picture in your head is a flat line: the same real budget at 90 that you had at 65.
In practice, retirees don’t behave that way. When researchers follow actual spending through retirement, they don’t find a flat line. They find a curve — high in the early years, easing down through the middle, then drifting back up at the very end. It looks like a smile.
This guide is about that shape: where it comes from, what it means for how big a nest egg you actually need, and the honest limits of treating an average as your personal forecast.
The three phases of retirement spending
Financial planners have a plain-spoken way to describe the arc, sometimes called the go-go, slow-go, and no-go years:
- Go-go years — the active early stretch, often your late 60s into your mid-70s. Health is good, the calendar is full, and this is when the travel, the projects, and the visits to family cost the most.
- Slow-go years — the pace settles. The big trips taper, routines get smaller and cheaper, and spending drifts down without any deliberate belt-tightening.
- No-go years — late life, when activity falls off but health and care costs climb. Spending stops falling and starts to rise again.
Plot real spending across those phases and you get the smile.
Real spending usually bottoms out about 26% lower in your mid-80s.
Read left to right: spending eases down through the active years to a trough near 84, then drifts back up as health costs rise — the shape that gives the curve its name.
The dip isn't a budget cut you have to impose — it's what spending tends to do on its own. Planning for the curve, not a flat line, keeps you from over-saving for years you likely won't spend as much in.
The curve below the 100% line is the part most plans miss. A flat-budget plan assumes you stay at 100% the whole way. The research says the typical household eases down to roughly three-quarters of its starting budget by the mid-80s before late-life costs pull it part of the way back.
Why the curve bends
Two forces pull in opposite directions, and the timing is what gives the smile its shape.
On the way down, discretionary spending fades. The most expensive years of retirement tend to be the first ones, while you still have the energy for the trips and the hobbies you waited your whole career to enjoy. That spending isn’t cut — it winds down on its own as the pace of life slows.
On the way back up, health and care costs rise. The late years bring more medical spending, and for some households, in-home help or long-term care. That tailwind is what turns the back half of the curve upward instead of letting it keep sliding.
The flat-line plan treats your budget like a thermostat set once and left alone. Real spending behaves more like your energy across a long day — high in the morning, lower in the afternoon, with a small second wind near the end. The smile just draws that day across thirty years.
What the smile means for the 4% rule
The 4% rule is built on the flat-line assumption, which makes it deliberately conservative: it sizes your portfolio to fund peak spending in every single year, including the slow-go years when you probably won’t want it. The smile says some of that budgeted spending never happens.
Over 30 years, the smile spends about $246K less than a flat plan.
Both lines start at the same $60K budget. The shaded gap is the spending a constant-budget plan assumes but the smile eases off of — about $1.55M versus $1.8M in today's dollars.
That gap isn't money you're forced to leave unspent — it's room. Spend it on the early years you'll enjoy most, or hold it as a cushion for the late ones you can't predict. The smile describes; it doesn't prescribe.
That gap is real money. On a representative budget, a household that follows the smile spends meaningfully less, in today’s dollars, over a thirty-year retirement than a flat plan assumes. Read one way, it means the flat 4% rule has a built-in margin of safety — you’re funding spending you may not do. Read another way, it means you might be able to retire on a little less than the strict 25× rule implies, or spend a little more freely in the go-go years while you can enjoy it.
The calculator lets you see both the spending curve and how long the money lasts side by side — switch the spending pattern between flat and smile and watch the finish line move.
Toggle flat vs. smile spending and watch how long your portfolio lasts under each.
Open the calculatorThe sequence-of-returns connection
Here’s the tension the smile doesn’t resolve. The go-go years — when spending is highest — are also the first years of retirement, which is exactly when sequence-of-returns risk is worst. A bad market in your first decade, while you’re withdrawing at your peak rate, does far more damage than the same bad market later would.
So the smile is a tailwind, not a rescue. The fact that you’ll likely spend less in your 80s doesn’t undo a portfolio that took a beating in your 60s while you were spending the most. The smile can make a comfortable plan a little more comfortable; it cannot make a fragile plan safe. That’s why the withdrawal calculator stress-tests a bad first five years on top of whichever spending pattern you choose — the two risks stack.
The honest caveat
The smile is an average, not a prediction about you.
- Higher-spending households decline faster. In the research, the households that started with the biggest budgets saw the steepest drops through the middle years. Lower-spending households stayed flatter. One curve can’t capture every household, so treat the shape as a tendency, not a schedule.
- Late-life costs are lumpy. The gentle upturn at the end is an average over many households. Your own no-go years could be inexpensive, or a single stretch of long-term care could dwarf everything else on the chart. The curve smooths over a risk that, for any one family, is anything but smooth.
- Your curve is yours. A retirement built around staying close to home looks different from one built around a decade of travel. Use the smile to question the flat-line default — not to lock in a number.
The point isn’t to plan for less. It’s to stop planning as if every year costs the same, and to notice that the years you can most enjoy your money are the early ones.
What to do today
- Sketch your own three phases. Roughly, what do you picture spending in your late 60s, your late 70s, and your late 80s? You don’t need precision — just notice whether your own expectation is flat or curved.
- Run both spending patterns in the Retirement Withdrawal Calculator. Compare how long the money lasts under a flat budget versus the smile, then add the bad-first-five-years stress test to each.
- Don’t shrink the go-go budget to be safe. If anything, the smile is permission to spend a little more in the years you’ll enjoy it most — provided the plan survives a bad early decade. Check that first.
- Read the Social Security guide next. The claim-age decision sets your guaranteed income floor, and the portfolio fills the gap above it — the smile shapes how big that gap is each year.