New parents may not be able to visualize that one day their largest expenditures won’t be centralized around providing necessities for their children. Adults go though many years of paying for diapers, toys, clothing, food, and education for their children. Yet, when the children have flown the coop, spending patterns change, and even more changes await come retirement.
According to a 2020 survey from the financial services firm Edward Jones, 68 percent of workers soon to retire said they had no idea how much they should be setting aside for expenses, particularly health care and long-term care. Professionals approaching retirement would be wise to analyze the Consumer Price Index - Elderly (CPI-E). It is a good reference to estimate which future expenses will cost the most after retirement. The Bureau of Labor Statistics looks at consumer spending and uses various data to determine the rate of inflation in key areas that apply to older adults starting at age 62.