Spending is Non-Linear

You come to me for counterintuitive observations. Here's a doozy about financial planning for old age.

Like most every 61 year old, I'm experiencing a dawning awareness of what old age is. Middle aged people love to joke about being "old". But once you cross 60, it's a whole other thing.

I just heard actor Bob Odenkirk describe running fast for a scene in cold weather without warming up, and horrendously tearing a bunch of muscles in his leg. Asked if it had healed ok, he replied "Yeah, I'm fine. Sometimes I have to wear a brace." That's it, right there. "Sometimes you wear a brace." Frame that sentiment.

Over 60, it's like managing a bag of sticks. And every day you need to do certain things to configure the sticks into a more or less functional human being. Sometimes you wear a brace!

I've posted many tips about self-healing. I'm weirdly good at it, rescuing myself from a number of supposedly incurable conditions. But while these moves once felt like miracles, now all that cleverness and resilience seems necessary just to bring myself up to par. And I don't scoff at "par"! I'm grateful for "par"! None of us is entitled to "par"!



But this is about financial planning. I've lived decently on savings without leaving my future self to subsist on cat food. Via thriftiness and smart investment (thanks to SIGA and Apple, plus a house sale at the height of the market, but especially the budget system I devised at age seven), I've even managed to grow my savings a bit while living off them. But now that I've spotted the end game, I recognize that while I'll certainly need cash in my doddering years, I won't get much joy from extra padding.

Even now, in half-decent health, I'm traveling less, because it's starting to feel daunting to shuttle my bag of sticks around to places where it might be less convenient to reassemble them. The "slowing down" we observe in old people isn't like machinery grinding to an eventual halt. It's a turn to visceral conservatism - comfort zone preservation - amid heightening precariousness.

At the same time, shiny things begin to lose their luster, and savings become propositional. Abstract. While your bank balance might once have conjured fantasies of blowing it all on speed boats or vacations in Aruba or weekend cabins, at the point where you notice your transformation into a bag of broken sticks, those fantasies become more remote. They never quite die, but it's like watching kids playing hopscotch. Regardless of any nostalgic impulses, it feels viscerally not-for-you.

So here's the counterintuitive observation: when you're doing financial planning, realize that spending won't be linear. You will absolutely want clean clothes and healthy food and a roof over your head when you're 85, but there will be vastly less interest in gadgets and vacations and fine copper cookware. Some stay "vibrant" longer, but they're edge cases, and it's largely genetic. Look to your parents and aunts and uncles to augur your likely time frame. Mine were decrepit and foggy by 70.

So: spending is non-linear. And I'm therefore letting myself spend more, to enjoy a last hurrah. But I'm a bit late. It already feels tinny. A bit "not-for-me". By the time I'm 70 (perhaps sooner), the door will be closed. And my point is that you should budget for this. Maybe have more fun in your 50s (adjusting all these numbers to fit your family's decrepitude pattern, plus your own health situation).

All that said, inflation can ravage even careful financial planning. So best to plan a bit high. But the notion that we can insulate ourselves via frantic saving is fallacious. Enough fabulously wealthy people have been transformed by unforeseen circumstance into paupers over the centuries that it should be clear that we mere mortals can't hoarde our way to surefire asset preservation.

If you're trying to maximize your estate for loved ones, this advice applies less. But, if so, you're a bit old-fasioned. Evidence (both formal and empirical) suggests that inherited windfalls don't contribute much to happiness beyond the sugar high. Though if you have kids working with fierce dedication in realms which happen to pay poorly, that's different. As a young jazz musician/writer, I could have used a windfall - not to fly business class, but to afford a few minor creature comforts while working myself to death at non-renumerative tasks. Also: estate considerations aside, philanthropy should be a strong consideration. All these considerations can factor into planning!

So budget for non-linear spending. Then, as you live forward, try to detect the crossover point where the notion of spending dough and having fun begins to elicit a "not-for-me" feeling. At that point, don't go nuts, but do maybe ramp up spending just a bit. Thinking more toward life infrastructure than to Porsches or second homes, what are some things you've denied yourself that you'd enjoy without jading? Maybe get the central air conditioning. The non-crappy car. Maybe add a couple more streaming channels or other media subscriptions. Maybe buy AirPods Pro, with their dandy tailorings for the hard-of-hearing. Consider a portfolio of slightly immodest quality-of-life improvements, and grab that low fruit, if budget allows. Because by the time you're 70 or 80 or 90, those things will matter far less.