Retirement spending isn't flat: the "go-go, slow-go, no-go" phases and what they mean for your plan

Almost every retirement calculator built into a super fund website does the same thing — it assumes you'll spend the same amount, in real (inflation-adjusted) terms, every year of retirement: $60,000 today, $60,000 in today's dollars at 75, at 85, at 95. That assumption underlies the popular "4% rule" and most "how long will it last" tools, and it is quietly wrong. Spending data from Australia, the US, and the UK consistently shows the same pattern: real discretionary spending declines through retirement, often substantially — not because retirees are forced to cut back, but because they naturally want to. Researchers and practitioners call this the "go-go, slow-go, no-go" phases — high spending in the active early years (roughly 65 to 75), a gradual decline through the middle (75 to 85), and low lifestyle spending in the later years (85 and over) — with one important upward kick at the end as care costs can rise, producing the "retirement spending smile". For Australian retirees, two features moderate the picture further: the Age Pension floor absorbs much of the late-life lifestyle drop, and the aged-care system caps means-tested care fees at a lifetime maximum, bounding the right-hand side of the smile. Understanding the curve matters because a flat-real-spending plan typically overstates what a retiree needs (and therefore drives underspending), while a "spend it all early" plan that ignores late-life care risks getting caught short. The honest plan accounts for both.

What happens in the go-go years?

In the first decade of retirement — roughly 65 to 75 — health and energy are generally high, social connections are strong, and the things people spent decades looking forward to (travel, hobbies, helping family, time at home) are physically and emotionally available. Real spending is at its peak during this phase, often noticeably higher than the long-term average, with international travel, home renovations, helping the kids onto the property ladder, second cars, and big-ticket experiences featuring heavily. For a retiree who has saved well, the go-go years are exactly what the savings were for, and the data says this is where the spending naturally flows.

What happens in the slow-go years?

Through roughly 75 to 85, health starts to require more attention. Long-haul travel becomes more tiring, and domestic trips replace international ones. Big purchases largely stop, social routines simplify, and discretionary spending plateaus and then declines — research suggests by perhaps 20 to 30% in real terms below the go-go peak — even though essentials such as housing, food, energy, and rates stay constant. The retiree isn't depriving themselves; they are just doing less, more locally, and at a calmer pace. This is the part of the curve most planning calculators ignore.

What happens in the no-go years?

From around 85, most retirees become much less active. Travel and big purchases largely cease, daily life is local and simple, and lifestyle spending often drops another 20 to 30% below the slow-go level. But the no-go phase is also when care costs can spike — formal home care under the Support at Home framework, residential aged care with its refundable accommodation deposit and means-tested daily fees, or expensive medical care for chronic conditions. For some retirees the late-life lifestyle decline and the rise in care costs roughly offset; for others, particularly those who enter residential aged care, the care costs exceed the lifestyle decline, producing the upward right-hand side of the spending smile. This is where the "care reserve" in the plan matters.

How do Australian specifics moderate the curve?

The Australian system softens the curve in ways that matter. The Age Pension provides a guaranteed floor — at the full rate, around $31,200 a year for a single person and $47,100 for a couple combined (based on the maximum rates of $1,200.90 a fortnight single and $905.20 each for a couple, 20 March 2026) (DSS Social Security Guide 5.1.8.10, https://guides.dss.gov.au/social-security-guide/5/1/8/10) — that catches retirees who spend their private savings faster than expected. This is fundamentally different from the US-centric retirement research most "safe withdrawal" thinking is built on: catastrophic running-out-of-money risk is materially smaller here, because there is a floor. The aged-care system also means-tests and caps what a person pays for care, with the means-tested care fee capped at $35,910.43 a year and $86,185.23 over a lifetime (20 March 2026), accruing from first entry into care (Services Australia, https://www.servicesaustralia.gov.au/annual-and-lifetime-caps-for-your-aged-care-costs). So the exposure to catastrophic care costs is bounded, which makes a finite care reserve a reasonable plan rather than an infinite-tail risk. And because most older Australians own their home outright, a major spending category stays low and stable throughout retirement. Together these features make the Australian retirement spending curve a little gentler than the international research suggests, and make a higher early-life spending plan more defensible.

Is this pattern the answer to chronic underspending?

A surprising number of Australian retirees underspend their assets, dying with super balances larger than the ones they retired with. The reasons are human and understandable — fear of running out, residual saving habits, social conditioning around "never touching the capital", and uncertainty about future care costs. The go-go/slow-go/no-go framework gives those people something to lean on: the empirical pattern that says they will spend less later, the Age Pension floor that says the downside is cushioned, and the aged-care cap that says the late-life care cost is bounded. For an over-cautious retiree sitting on more than they will ever use, that combination is the explicit permission to spend more in the years when they have the health to enjoy it. The framework doesn't say "spend it all" — but it does say flat-real planning probably overstates what they need to hold back.

How do you apply the framework in a plan?

The cleanest way to use the curve is to build a three-phase cash-flow model. Target spending in the go-go years at a higher level (sometimes around 120% of the long-run average as a planning figure); in the slow-go years at the long-run average; and in the no-go years at perhaps 75 to 80% of the average for lifestyle, with a separate care reserve (often suggested in the range of $150,000 to $300,000 depending on circumstances) held back for residential aged care or significant home-care costs. Variable withdrawal strategies — drawing more early and tapering with age, or using different sustainable rates in each phase — match the spending pattern more closely than a flat 4% rule. Bucket strategies can be extended to phases, with a "go-go bucket" of cash and short bonds for the active years separate from longer-duration growth assets for the long tail, and the care reserve segregated. None of this eliminates sequencing risk — a bad market in the early high-spending phase still damages the plan more than a bad market 20 years in — so the spending-curve approach sits alongside, not instead of, ordinary risk management. And the model should be revisited at every review, because a serious health event can collapse someone from go-go straight into slow-go, while sustained good health can extend the go-go phase into the early 80s. (The percentage planning figures here are illustrative conventions drawn from spending research, not guarantees; an individual's pattern depends on their health, lifestyle, and circumstances.)

What does the spending curve look like in practice?

These two cases show the curve in practice. They are illustrative only and not personal advice.

Hannah, 71, has $900,000 in super, owns her home outright, and receives no Age Pension (her assets just exceed the threshold). She is drawing $48,000 a year from her account-based pension and her actual spending is around $52,000, and she has been quietly anxious about "running out" for the next 25 years. On these facts, Hannah is the textbook underspender. A flat-real plan at $52,000 a year over 25 years on a $900,000 balance is comfortably sustainable — even on conservative return assumptions, she would die with substantial wealth. On these facts it is generally rational to show her the spending curve: at 71 she is in the go-go years, and the data says her spending will naturally fall later, particularly through her 80s. The plan can comfortably support, say, $65,000 to $70,000 a year in the go-go years through perhaps age 78, tapering toward $50,000 in her 80s, then a lower lifestyle figure plus a separate care reserve from her mid-80s (illustrative figures). The strategy work is to lift her targeted go-go spending (the travel, the visits to family, the home comforts she has been deferring), reframe the unspent drawdowns as permission to enjoy rather than money to recycle, set aside a notional care reserve (say $200,000) for the no-go phase so she doesn't double-count it, and note that her Age Pension position improves as her balance draws down — she may become eligible for a part pension in 5 to 10 years, adding a floor toward the $31,200 single full rate (DSS Social Security Guide 5.1.8.10, https://guides.dss.gov.au/social-security-guide/5/1/8/10). Hannah ends up better aligned with the pattern her own life will follow.

Eustace, 66, has just retired with $1.5 million in super, a paid-off home, and an active five-year plan to travel internationally with his wife. He is worried about whether spending roughly $100,000 a year for the next 10 years is "too much", because his fund's calculator says it isn't sustainable over a 30-year retirement. On these facts, the calculator's flat-real assumption is misleading him. Spending $100,000 a year is at the upper end of what is sensible, but as a go-go-years target it is consistent with the empirical curve — he would typically taper from this peak through his 70s into a lower-spending 80s. On these facts it is generally rational to front-load the next 10 years for the active phase (drawing on an "experience bucket" of cash and short-duration assets), plan for around $70,000 a year in the slow-go phase from his late 70s, a lower lifestyle figure plus a ring-fenced care reserve (say $250,000) from the mid-80s, and rely on the Age Pension floor if the balance draws down faster than expected — his wife may become eligible for a part pension during the slow-go phase, and the means-tested care fee is in any case capped at $86,185.23 over a lifetime (Services Australia, https://www.servicesaustralia.gov.au/annual-and-lifetime-caps-for-your-aged-care-costs). The model isn't unsustainable — it is just shaped differently from flat-real. With the care reserve in place and the floor behind it, Eustace can confidently spend the next decade doing the things he has planned, rather than reining it in because the calculator gave him the wrong shape of question.

For retirees thinking about how their spending will evolve, the go-go/slow-go/no-go framework is the most useful corrective to the flat-real assumption baked into nearly every retirement calculator. The work is to introduce the curve as a default pattern (not a forecast), to use it to address chronic underspending in cautious clients (the data says spending falls later, the Age Pension catches the downside, and the care system caps the upside risk), to build cash-flow plans across three phases with explicit spending levels in each, to ring-fence a care reserve rather than relying on the no-go-phase lifestyle decline alone, to match the withdrawal strategy to the phases, to revisit the model at each review because health changes shift people between phases, and to keep ordinary sequencing-risk management alongside (the curve doesn't eliminate it). The headline for most people is the corrective one: your retirement spending probably won't be flat, the data says it tends to fall, and planning for the actual pattern usually lets you enjoy your retirement more, not less, than the calculator suggested. The specific figures move with policy and longevity data, so confirm the current Age Pension rates and aged-care caps before relying on them — but the shape of the curve is durable.

Sources

• DSS Social Security Guide 5.1.8.10 — Common pension rates
• Services Australia — Annual and lifetime caps for your aged care costs