According to JP Morgan Asset Management, about 35% of retirees experience this surge, often spending 5% to 10% more than usual—sometimes up to 25%. The cause? Travel, home upgrades, supporting kids or grandkids, healthcare catch-up, and finally having the time to enjoy hobbies you’ve been putting off.

Take, for example, a couple that usually budgets $90,000 per year in retirement spending. If they surge to $110,000 for a few years, that’s an extra $20,000 annually—or $100,000 over five years. That extra spending needs to come from somewhere, and it can jeopardize portfolio longevity if not planned carefully.

Why the Surge Matters

Withdrawing too much early—especially during a market downturn—can reduce future compounding and increase the risk of running out of money. This is known as sequence of returns risk, and it’s a real threat for retirees who aren’t properly allocating their resources.

Smart Ways to Plan for the Surge

Financial expert Aaron suggests building a cushion of cash—$45,000 to $100,000 depending on your goals—set aside specifically for this spending bump. This money should be kept liquid and outside of long-term investment accounts. It gives you the freedom to spend without constantly worrying about what the markets are doing.

In addition, adjusting your retirement date or temporarily boosting your savings rate in your final working years can help fund this surge. Another option? Implementing a bucket strategy, where you keep different tranches of your retirement savings in varying levels of risk based on when you’ll need them.

Where the Money Goes

Retirement surges are often bucket-list driven. Travel ranks #1: extended trips, family vacations, or even purchasing a second home. But the surge also includes:

• Home improvements (new kitchens, roof repairs, etc.)
• Healthcare spending (finally addressing long-delayed issues)
• Family support (college help, weddings, down payments)
• Lifestyle upgrades (new hobbies, club memberships, etc.)

Things Settle Down Later

The good news? The surge doesn’t last forever. Most retirees slow down after the initial burst of activity. Health changes, lower energy, and a settled routine help curb spending. You travel less. You cook more at home. Your financial priorities shift.

That’s why it’s smart to plan for more in the beginning and let things normalize later. With a flexible, well-organized financial strategy, you can spend freely when it matters most—without worrying about blowing up your entire retirement plan.

Final Thought

Retirement should be joyful, not stressful. Anticipating a spending surge and budgeting for it on purpose helps you spend with confidence. You’ve earned this time—so don’t let unplanned expenses or guilt keep you from enjoying it.

Want to make sure your retirement budget includes the freedom to travel, remodel, or just breathe easy? Start planning for the surge now.

All writings are for educational and entertainment purposes only and does not provide investment or financial advice of any kind.

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