Spending Phase

DEFINITION of 'Spending Phase'

The period in a person's life following retirement in which earning income has come to a stop and the person is living off government subsidy, retirement plans, investments and/or money saved for retirement.

BREAKING DOWN 'Spending Phase'

During the spending phase of a person's life, income may decrease substantially, but this likely coincides with a decrease in expenses. Children are usually no longer dependent on their parents in the spending phase, and major assets (such as mortgages) may be paid off. Traveling, relaxing and enjoying retirement are the principle goals of someone living in their spending phase.

RELATED TERMS
  1. Retirement Planning

    The process of determining retirement income goals and the actions ...
  2. Consumption Smoothing

    The ways in which people try to optimize their lifetime standard ...
  3. Retirement Readiness

    The state and/or degree of being ready for retirement. Retirement ...
  4. Phased Retirement

    A broad range of employment arrangements that allow an employee ...
  5. Retirement Planner

    A practicing professional who helps individuals prepare a retirement ...
  6. Personal Spending Plan

    Similar to a budget, a personal spending plan helps outline where ...
Related Articles
  1. Financial Advisors

    How to Help Clients Plan a Phased Retirement

    The notion of phased retirement is gaining traction. Here's how advisors can help clients plan accordingly.
  2. Financial Advisors

    Retirement's Evolution: How to Be Prepared

    For many, retirement might not be the full stoppage of work and living a life of leisure but rather one of slowly phasing out of the workforce.
  3. Retirement

    5 Steps To A Retirement Plan

    These considerations will help you make a realistic and thorough retirement plan.
  4. Retirement

    What Is a Phased Retirement and How Do I Get One?

    Workers around the country are redefining what retirement looks like. One way is a phased retirement, in which you gradually exit the workforce.
  5. Saving and Spending

    Is the 80% Retirement Rule Valid for Clients?

    Is the 80% rule of thumb for retirement spending a reasonable one?
  6. Financial Advisors

    Retirement Savings: How Much is Enough?

    Sure, you can never save too much for retirement, but just how much is enough?
  7. Retirement

    Why Saving 10% Won't Get You Through Retirement

    Retirement experts often tout the 10% rule: To have a good retirement, you must save 10% of your income. The truth is, most people need to save far more.
  8. Retirement

    Three Stages of Retirement: A How to Guide to Plan for Them

    Retirement isn't something you can plan for and forget. Your needs will change at different points, which is why you need to plan for the different stages.
  9. Your Clients

    Top Tips to Transition into Retirement Confidently

    Here are some of the best ways to make the transition to retirement painless.
  10. Retirement

    5 Apps & Calculators for Retirement Planning

    These are but a few of the numerous mobile apps and online calculators that are available to future and near retirees.
RELATED FAQS
  1. What happens during the consolidation phase of an investor's life cycle?

    Unlike the accumulation phase – where emphasis is placed on growing wealth – the consolidation phase is a balance between ... Read Answer >>
  2. What does a sample plan using the 4% retirement rule look like?

    Discover how the 4% retirement rule can work as part of a plan to achieve increasing retirement income if investments perform ... Read Answer >>
  3. How soon should I start saving for retirement?

    Learn about the basics of retirement planning and the reasons why it is so advantageous for individuals to start saving for ... Read Answer >>
  4. How can I increase my standard of living in my retirement years?

    Find out how to plan for retirement, target a standard of living and improve your financial situation once you've already ... Read Answer >>
  5. Should I put money into a retirement account even if it isn't tax deductible?

    One of the biggest and most often-touted advantages of putting money into a retirement account is the tax savings that come ... Read Answer >>
  6. What are the best ways to plan for retirement?

    Learn the basic steps to creating a solid retirement plan that can support you and your family, and find out how to manage ... Read Answer >>
Hot Definitions
  1. Yield Curve

    A line that plots the interest rates, at a set point in time, of bonds having equal credit quality, but differing maturity ...
  2. Stop-Limit Order

    An order placed with a broker that combines the features of stop order with those of a limit order. A stop-limit order will ...
  3. Keynesian Economics

    An economic theory of total spending in the economy and its effects on output and inflation. Keynesian economics was developed ...
  4. Society for Worldwide Interbank Financial Telecommunications ...

    A member-owned cooperative that provides safe and secure financial transactions for its members. Established in 1973, the ...
  5. Generally Accepted Accounting Principles - GAAP

    The common set of accounting principles, standards and procedures that companies use to compile their financial statements. ...
  6. DuPont Analysis

    A method of performance measurement that was started by the DuPont Corporation in the 1920s. With this method, assets are ...
Trading Center