Do Retirees Want to Consume More, Less, or the Same as They Age?

The conventional view is that retirees prefer steady consumption as they age, but research focusing on new retirees tends to show a sharp drop right at retirement. This study looks at consumption over longer periods and explores whether wealth and health constraints might cause retirees to consume less than they prefer. The findings confirm that, for households as a whole, consumption does decline. However, these declines are at least partly driven by constraints, because households that are wealthier and healthier have relatively flat consumption.