The Three Phases of Retirement Spending: Why Your Income Needs Change Over Time

Retirement is often thought of as a time to relax and enjoy the fruits of your labor. However, the reality is that your retirement income needs are likely to change over time. In fact, retirement can be divided into three distinct phases: the go-go years, the slow-go years, and the no-go years. Understanding these phases can help you plan for the future and ensure that you have enough money to last throughout your retirement.

The Go-Go Years

The go-go years are the first phase of retirement, usually lasting from age 65 to 75. During this time, many retirees have more time and energy to pursue their passions, travel, and spend money on leisure activities. As a result, retirement spending tends to be higher in the go-go years.

According to a study by the Employee Benefit Research Institute, retirees typically spend 44% more on entertainment, transportation, and other discretionary expenses during the first two years of retirement compared to the average spending of pre-retirees in the last two years before retirement.

However, this elevated spending is not sustainable throughout retirement. As retirees age, they tend to slow down and spend less on leisure activities.

The Slow-Go Years

The slow-go years are the second phase of retirement, typically lasting from age 75 to 85. During this time, retirees tend to spend less on travel and other discretionary expenses and focus more on staying close to home, spending time with family and friends, and pursuing hobbies that don’t require as much physical activity.

According to a survey by T. Rowe Price, retirees in their 70s and 80s spend significantly less on travel and entertainment than they did in their 60s. This is partly due to declining health and mobility, but also reflects a shift in priorities as retirees age.

The No-Go Years 

The no-go years are the final phase of retirement, typically beginning after age 85. During this time, retirees may face health issues and require more assistance with daily activities. Retirement spending tends to be focused on basic necessities, such as healthcare and housing, with little left for discretionary expenses.

According to data from Statistics Canada, the median household consumption spending drops by about 25% as Canadians transition through retirement. This decline is due in part to reduced spending on discretionary items, but also reflects the fact that many retirees downsize their homes or move in with family members as they age.

The transition through these phases occurs gradually and over time. The data from T. Rowe Price again indicates that median annual household spending changes between the ages 65 and 90 at an inflation-adjusted or real spending decline rate of 2% annualized.

Retirement is not a static period of life. Understanding the three phases of retirement spending can help you plan for the future and ensure that you have enough money to last throughout your retirement.


  1. Banerjee, Sudipto, Expenditure Patterns of Older Americans, 2001-2009 (February 2012). EBRI Issue Brief, No. 368, February 2012, Available at SSRN:
  2. Banerjee, Sudipto, Decoding Retiree Spending, March 2021:
  3. Statistics Canada. Table 11-10-0227-01  Household spending by age of reference person