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6 Types of Retirees: Which One Are You? (Success Rates Will Surprise You)

Why Your Retirement Lifestyle Choice Determines Your Financial Future

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because retirement doesn’t come with a manual

Your trusty L-Plater is back, navigating the twists and turns of retirement (and pre-retirement!) so you don't have to go it alone. Fasten your seatbelts, it's time for another dose of wisdom, wit, and ways to make this chapter your best one yet!

The quick scan: Thursday delivered a mixed performance that perfectly illustrated how individual company stories can override broad market trends. The S&P 500 and NASDAQ managed to eke out their fourth and second consecutive record closes respectively, powered by Alphabet's strong AI earnings, while the Dow took a 316-point tumble thanks to IBM's disappointing results and Tesla's profit drop—proving that even in a bull market, not everyone gets invited to the party.

• S&P 500: Rose 4.44 points (0.07%) to close at 6,363.35, marking its 13th record close of 2025 with the determination of someone who refuses to let a few bad apples spoil the bunch
• Dow Jones: Fell 316.38 points (0.70%) to 44,693.91, weighed down by IBM's 7% slide and proving that blue chips can still have bad hair days even when everything else is going right
• NASDAQ: Advanced 37.94 points (0.18%) to 21,057.96, notching another record close as Alphabet's AI success reminded investors why tech stocks command premium valuations

What's driving it: Earnings season continues to separate the winners from the also-rans, with AI-focused companies like Alphabet showing strong results while traditional tech players like IBM and Tesla faced headwinds. Trade talk optimism provided a supportive backdrop, but individual company performance remained the primary driver.

Bottom line: Thursday's split performance suggests that markets are becoming increasingly selective about which companies deserve premium valuations. When two indices can hit records while the third declines, it usually means investors are doing their homework rather than buying everything that moves.

The Retirement Spending Smile: Which Type of Retiree Will You Be?

how do you envision your retirement?

The scoop: Here's a reality check that might make you reconsider your retirement planning assumptions: Morgan Stanley's research reveals that retirement spending doesn't follow the neat, predictable pattern most people imagine. Instead of simply withdrawing 4% of your portfolio each year with small inflation adjustments, retirement spending typically follows what they call a "retirement spending smile"—high in the early active years, lower in the middle years when you slow down, and higher again in the final years when medical costs kick in.

But here's where it gets really interesting: Morgan Stanley identified six distinct types of retirees, each with dramatically different spending patterns and success rates. Using a hypothetical $2 million portfolio (60% stocks, 40% bonds), they tested how each retirement lifestyle would fare over the long haul. The results might surprise you—and could fundamentally change how you think about your own retirement planning.

The six retirement personalities:

1. Average Retirees (66% success rate): These are the steady Eddies of retirement, following the classic spending smile pattern. They're neither the most exciting nor the most extravagant, but they have the second-highest chance of making their money last. Think of them as the Toyota Camry of retirement lifestyles—reliable, practical, and likely to get you where you need to go.

2. Entertainers (66% success rate): These social butterflies spend more on food and beverages to host friends and family, but their overall spending declines more rapidly in early retirement than other groups. They tie for the highest success rate, possibly because entertaining at home is often more cost-effective than going out, and their spending naturally decreases as energy levels wane.

3. Home Hobbyists (51% success rate): The DIY enthusiasts who pour money into home remodelling, antique car restoration, and community projects. They have above-average spending early on but moderate success rates. Their challenge is that home improvement projects have a way of expanding beyond initial budgets—ask anyone who's ever said "while we're at it, let's also..."

4. Health-Care Spenders (43% success rate): These proactive health advocates spend significantly on higher insurance premiums, prescription drugs, and treatments beyond basic coverage. While their health-first approach is admirable, the financial reality is sobering. They face the challenge of rising medical costs that often outpace inflation.

5. Globetrotters (12% success rate): The wanderers who spend heavily on travel before and especially during retirement. With only a 12% chance of covering all expenses, they face a harsh mathematical reality: extensive travel is expensive, and the costs compound when you have more free time to indulge the habit.

6. Early Birds (2% success rate): The "you only live once" crowd who retire early and maintain high spending on travel and entertainment. With just a 2% success rate, they face the double whammy of a longer retirement period and higher spending, plus the added burden of paying for health insurance out-of-pocket until Medicare kicks in at 65.

The sobering math

The good news? All six types had a very high likelihood of covering their essential expenses like food and housing throughout retirement. The challenge comes with discretionary spending—the fun stuff that makes retirement enjoyable rather than just survivable.

The study's most striking finding is how dramatically lifestyle choices affect financial outcomes. The difference between Entertainers (66% success) and Early Birds (2% success) isn't just about money—it's about fundamentally different approaches to what retirement should be. One group finds joy in hosting dinner parties; the other seeks adventure in exotic locations. Both are valid, but only one is financially sustainable for most people.

Strategies that can help any retirement style

Fortunately, Morgan Stanley identified three strategies that can improve the odds for higher-spending retirees:

Part-time work in early retirement can boost savings while keeping your mind engaged. This is particularly valuable for Early Birds and Globetrotters who might otherwise burn through their savings too quickly.

Belt-tightening when investments underperform gives your portfolio space to recover and grow. This requires discipline but can be the difference between a comfortable retirement and a stressful one.

Time-segmented bucketing involves allocating assets into three pools corresponding to the three phases of retirement, with each pool invested according to its time horizon. Think of it as having separate accounts for "fun money now," "steady income later," and "medical emergencies eventually."

Actionable Takeaways:

• Identify your retirement personality: Honestly assess which of the six types most closely matches your spending preferences and lifestyle goals. Don't choose based on what sounds most appealing—choose based on how you actually live and spend money now.

• Run your own numbers: Use the success rates as a starting point, but calculate your specific situation. If you're a Globetrotter with a 3 million portfolio instead of 2 million, your odds improve significantly. If you're an Average Retiree with $1 million, you might need to adjust expectations.

• Plan for the spending smile: Build flexibility into your retirement budget that accounts for higher spending in early years, lower spending in middle years, and potentially higher medical costs later. Don't assume your expenses will remain flat throughout retirement.

• Consider hybrid approaches: You don't have to be purely one type. Maybe you're a Home Hobbyist for the first five years, then transition to Average Retiree spending patterns. Or perhaps you're an Entertainer who takes one big Globetrotter trip per year.

• Build in backup strategies: Identify which of the three success strategies (part-time work, belt-tightening, bucketing) would be most realistic for your situation. Having a Plan B before you need it is always smarter than scrambling when markets underperform.

• Test your assumptions early: If you're planning to be a Globetrotter or Early Bird, consider taking a "practice retirement" year to see what your actual spending looks like. You might discover that your dream lifestyle costs more (or less) than you imagined.

Your Turn:
Looking at these six retirement personalities, which one resonates most with your vision of retirement?
Are you surprised by the success rates, or do they align with what you intuitively expected about different spending patterns?
If you're currently planning to be a Globetrotter or Early Bird, does this research make you want to reconsider your approach, or are you confident that the lifestyle is worth the financial risk?
Drop a comment below and share which retirement personality you're aiming for—I'm curious whether people are willing to adjust their dreams based on the math, or if they're planning to find ways to make their preferred lifestyle work regardless of the odds!

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The L-Plate Retiree Team

(Disclaimer: While we love a good laugh, the information in this newsletter is for general informational and entertainment purposes only, and does not constitute financial, health, or any other professional advice. Always consult with a qualified professional before making any decisions about your retirement, finances, or health.)

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