Upon reaching retirement, a retiree theoretically begins to spend down money and enjoy it. Yet in practice, a growing base of research finds that retirees just continue the growth of their pre-retirement portfolios, suggesting a consumption gap between what retirees could and should spend versus what they actually do.

However, given compounding inflation can double or even quadruple spending needs after 30 years, retirees actually should allow their portfolios to grow slightly for at least the first half of retirement. It’s a necessity just to cover later years’ spending needs at their inflation-adjusted levels.

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